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26 November 2008 Darling cuts VAT to 15%
Alistair Darling has slashed VAT from 17.5% to 15% in a bid to boost consumer spending.
In his annual Pre-Budget statement, the Chancellor confirmed that the radical cut would take effect from Monday 1 December 2008 and will be offset by higher duties on petrol, alcohol and tobacco.
The rate will remain at 15 % until 1 January 2010 when it will revert to 17.5%.
Zero-rated supplies, such as basic foodstuffs, children’s clothing and books; exempt supplies, such as education and health; and supplies subject to VAT at 5 %, such as domestic fuel and power are not affected by this change.
European law dictates that VAT can fall no lower than 15%.
To discuss how the changes may affect both you and your business, please contact us.
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