Will There Be A VAT Panic?

Come 4th January, VAT will be at 20%. But will this make a difference?

When VAT fell to 15% just before the start of 2009, the Government thought that it would give the buying public the nudge to start spending a little more. In reality we found that it made hardly any difference. All it did was make paperwork more difficult when it rose back up to 17.5%. It didn't create a surge in sales, or a spike in new appointments.

And when you turn it into numbers, and extra 2.5% less is only £25 every thousand. It's not going to make much difference on a house full of windows and doors.

So what about the 20% VAT figure. Again I don't think it will have too much of a negative impact on the buying public. Adding another £25 every thousand isn't going to put Mr & Mrs Smith buying that big item, be it holidays, new windows or a new car. What I do think will happen is it will bring the Yorkshire out of everyone. No one likes parting with any more money than they have to. There could be a bit of a rush before the end of the year to replace people's windows and doors before the VAT rate goes up. It's only another £25, but when money is tight and everyone is being as economical with their money as they can, it's an extra bit of cash they won't want to give away.