Pre-Budget Speech: VAT cut and how it affects consumers

With Consumers already taking advantage of struggling retailers slashing 20 to 30 percent of all their goods to encourage spending, the 2.5 percent extra discount consumers will receive by the Chancellor cutting VAT down from 17.5 percent to 15 percent will make little or no difference at all.

The cut in VAT is highly unlikely to get consumers spending again although the Chancellor said that it was a move to increase consumer spending. However it is also unlikely that consumers will be rushing to stock up on their Christmas beverages due to the Chancellor increasing the tax in alcohol duty to part pay for the cut in VAT, it has been noted that the pre-budget is a budget where the government give with one hand and take away with the other.

Retailers have said that the VAT cut will make no difference at all, and in-fact businesses will have to spend more money on re-advertising and changing pricing systems. Experts have also warned that the VAT cut may not even be seen by the consumer due to the huge cuts the retailers are already making.

Source: thisismoney