Shoppers change habits due to VAT cut

Date: 24th November 2009

Many British consumers are planning to buy extra goods prior to the end of the VAT cut in January 2010, a new poll has revealed.

The survey, conducted on behalf of the BBC by pollsters ComRes, showed that 27 per cent of people will change their shopping strategies in order to take advantage of the 15 per cent sales tax rate.

VAT was cut from 17.5 per cent last year in order to provide an economic stimulus - and will revert to this rate in the New Year.

The poll showed that 32 per cent of people believe their spending will decrease when VAT goes back up and that 23 per cent had spent money they would not have spent otherwise due to the tax change.

Speaking to the broadcaster, treasury minister Stephen Timms said that there were "no plans" to make future VAT cuts or to extend the lower rate into the New Year.

The government is currently facing rapidly rising public deficits, which have themselves partly been caused by markedly lower tax revenues in the recession.

A total of 1,002 UK adults were questioned for the BBC/ComRes survey.

Posted by Jacob Williams