Will The New 15% VAT Rate Make You Buy More Gadgets?

via Gizmodo UK


Labour's much-publicised VAT cut is the latest attempt to boost a flagging economy and encourage consumers to put their hands in their pockets and hit the high-street.

That means YOU people, but is the government's apparently generous reduction really a good thing?

Alistair Darling likes to talk of the £12.5billion it'll be putting into customers pockets, but isn't so keen to speak of the fact that it'll send borrowing soaring above £100billion and place a serious black mark on an already flaky balance sheet.

The reduction comes into effect on the 1st of December and will last for 13 months, purposefully covering two Decembers and therefore two Christmas shopping seasons.

The problem is that 2.5% is a paltry saving when you consider that stores are already doing their own damage limitation by dropping prices by far higher margins to encourage people to shop. When you throw in online discounts, which can often range from 20-50% off SRP into the mix it starts to sound like the government is digging a deeper financial hole for no real reason.

Here are a couple of examples - a litre of petrol that previously cost 94p will now cost 92p, which is the sort of saving you can easily make by hunting around for a cheaper garage. A £14.99 music CD will now cost £14.67, a TomTom satnav that cost £99.99 will cost £97.86 and a 32" Samsung TV priced at £399.99 will net you £8.51. Admittedly savings do stack up, but are they enough to make a significant difference to our spending?

With all of these issues on the table, spare a thought for high street stores who face the task of relabelling thousands of products during the busiest time of the year to reflect the emergency cut.

Do Gizmodo readers appreciate the VAT cut or think it'll send the country (and the pound) into even more dire straits?

Again the goverment thinks with its little brain
This scam helps out no one in the long run..
Especialy those in the poorer end who have nothing to spend, what will they save?

Well I'am One and I will not benifit in the long run, unless I become richer by some miricle then i wouldn't need to worry about money any more and the tax man.lol

But now in the real world my income hasen't risen to match the crazy price rise over every thing we buy in the last few years

To help the british people cut income tax to those who need it and tax those more who would not miss it

£1000.00 a year I can live with a bigger tax band
My income ( two adults 1 child)doesn't reach 12 k where is my help and others which are in the millions like me where is our help?

We get out there and vote for Labour hoping they will wake up and deal with the poverty we are in but alas fools to belive any party of the goverment realy cares

What is the point in voting they all don't do what should be done,

"Look after all it's citizens"
not just those with cash to save or spend!

2.50 per cent off the Vaule Added Tax certainly isn't going make be buy stuff faster, that's for sure. Not much in savings to be gained and prices most probably will just stay more or less the same anyway.