Yesterday, the Office for National Statistics (ONS) released provisional
estimates of the public finances showing that in October 2009 the public sector
- a current budget deficit of £7.7 billion;
- net borrowing of £11.4 billion; &
- at the end of October, net debt was £829.7 billion, equivalent to 59.2% of
gross domestic product.
UK “skint as a country”
On 1st January, the UK’s VAT holiday will end as the tax rate returns to 17.5%
M&S chairman Stuart Rose says we should expect another increase
next year as the Government looks for ways to pay off the deficit. “We are
skint as a country,” he said. “The Treasury needs revenue so I would not rule
it out … this Government and the future Government have got to make some hard
decisions about refilling the coffers”.
Retailers, already squealing about the return to a 17.5% VAT rate, fear a
further increase would kill off the recovery before it’s begun.
But the Guardian estimates a VAT increase to 20% would raise
an additional £12 billion a year for the public purse. And levying VAT
on food – which is currently exempt – albeit at a lower rate of 5%, would bring
in another £3.5 billion a year.
** Additional Information & Advice **
Depending on your circumstances, however, it may be a good idea to speak with a solicitor who specialises in tax law. You can be
matched with a solicitor for free via solicitor matching
services, which can also help you to understand the best course of action for
your situation and whether you are ready to hire a solicitor.
VAT Rate Will Return To 17.5% From January 1,
2010 (FindLaw – August 25, 2009)
UK VAT Rate: Government Announces 15% Rate Will Extend
Into 2010 (FindLaw – November 4, 2009)
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