‘The cost of many goods and services will rise by more than three times the rate of the VAT increase as businesses use the tax to mask a more dramatic price review, leading industry experts warn today.’
‘John Lewis, Marks & Spencer, Tesco and other big retailers have said they will delay (sic) the introduction of today's VAT increases on most or all of their products for at least a few weeks as they wait to see what action their rivals take.’
‘Middle-class households will have to pay nearly £600 in extra taxes this year after today’s 2.5 per cent rise in VAT, according to new research carried out for The Times.’
‘Shoppers face chaos from today as many stores are neglecting to adjust the price tags on goods for the VAT rise and will simply charge more at the till. Retailers will also use the VAT rise to disguise hefty price hikes of more than three times the necessary amount, it was claimed last night.’
‘STRUGGLING Brits are being hit with a triple whammy – a painful VAT increase along with huge rises in train fares and petrol prices.’
Headlines sell papers. Notice the confusion though. Some report that retailers are increasing their prices by more than the increase in VAT. Others report that retailers will have to absorb the increase and will suffer reduced profits as a result. Depends who you ask I guess.
And let's not forget that:
- VAT also went up by 2.5% last January.
- The average rate of VAT in the EU is almost 21%.