20 October 2009
Retailers have slammed the government for the timing of its VAT increase which is to return its original 17.5% in the New Year - the busiest period in the year for the shops and retailers.
The government announced the cut in VAT to 15% in the pre-budget report in November 2008 and said the measure would only be for the short term to help bolster the economy. But retailers have asked the government to delay the re-introduction of the increase in tax until a month after the New Year period.
Executive chairman of Marks and Spencer Stuart Rose said: ‘If the government had any sense, they would delay it for a month…The key question is what it’ll do for sales, because the cost to customers will rise at a really important trading time. And there’s also the admin.’
The British Retail Consortium, a trade body, sides with the views of retailers and is lobbying the government to delay the change in VAT. BRC spokesman Richard Dodd said the government needs to consider that the 2.5% increase ‘is terribly distracting for retailers at their busiest time’.
He added: ‘Re-pricing to incorporate the new tax rate is an enormous exercise, and, as we emerge from this recession, Christmas is even more important for retailers.’
