Business group attacks planned VAT increase

Date: 4th August 2009

A business lobby group in the north-west of England has attacked plans to increase the rate of value-added tax (VAT) on January 1st 2010.

Private Sector Partners said that the proposal to increase the VAT rate to 17.5 per cent on New Year's Day is "sheer stupidity", the Manchester Evening News reports.

The group's leader, Len Collinson, added that the tax rise would add to bureaucracy and pressure on small business and retailers.

Alistair Darling, the chancellor of the exchequer, cut the VAT rate from 17.5 per cent to 15 per cent in last year's Pre-Budget report.

The temporary cut came into effect in December 2008 and was due to continue until the end of 2009.

Mr Collinson, whose organisation represents some 100,000 business in the north-west, said that it was a mistake "to cut VAT so modestly in the first place".

He added: "Imposing the increase on New Year's Day as retailers are launching their sales, at one of the busiest times of the year, is sheer stupidity."