VAT increase will hit consumers in 2010
Published: 25 November 2009 By MoneyHighStreet Staff Leave a Comment
The rise in VAT back to 17.5% will hit consumers in 2010, however research shows that many Brits are unaware and unprepared for this increase in their costs.
Research from Auto Trader shows that 12 million Brits are unaware that VAT will rise back to its normal 17.5% level on January 1st 2010.
The study shows a lack of consumer awareness over the impact the rise could have, especially on large purchases. Of those intending to buy expensive items such as televisions, holidays or cars, the majority (55%) did not plan on bringing these forward before VAT increases.
However, nearly a third (30%) of those questioned in the research did say that they would closely at their spending habits in 2010 as prices increase because of the higher VAT.
It is not just the impending rise in VAT that will hit consumers wallets next year. The car scrappage scheme, which offers £2,000 towards the cost of a brand-new vehicle when trading in a vehicle over 10 years old, is set to close in February.
Apparently one in twenty people are intending to buy a car during the next three months so it makes sense to benefit from the lower VAT rate this year as well as the saving that can be made with the car scrappage scheme.
This is a point picked up by Matt Thompson, Marketing Director at Auto Trader, who says: “The impending rise in VAT and the end of the car scrappage scheme make a compelling case for bringing your car purchases forward to before Christmas.”
“Our research has proven that the public is still lacking much of the critical information on both proposals and we are highlighting these issues so that consumers can act now.”