VAT 20% Right Way To Grow?

What is VAT?

Well VAT is simply a tax charge which is allocated for most transactions on day to day spending. For example, businesses attach VAT to the price of the product, which they are selling.
To break it down, there are three different types of VAT rates which are :


Standard rates 20 per cent
Reduced rates 5 per cent
Zero rates: 0 per cent


Standard rates:
Standard VAT rates within the UK, are rates which have been implemented among most of the goods and services that we purchase.  These are such things as bus fares, electrical goods and price of holidays.


Reduced rates:
Reduced rates, these are products or services which have been reduced –rated , because of the product itself or the circumstances of the sale. For example products which are on the January sale. Also goods being reduced because of the condition that they are in.


Zero rates:
Zero rated goods, are products which have absolutely no tax rates.
For example food, except for meals in restaurants and also children’s clothing.

Why is there an increase of tax?

Well according to the government, they think, “it is necessary to help bring down the UK’s high budget deficit”.

When the tax increased was revealed in the summer of 2010, chancellor George Osborne stated “ it would raise more than £13bn a year by the end of the parliament”.

So how is the increase of VAT going to effect us ?

Personally, even though the government are increasing VAT to bring down the UK’s high budget deficit. This poses as an extreme burden towards working class people.

This is because mostly everything which we purchase, has had a 2.5% increase. Even towards the little things such as bus fare. For example bus fare was £2 and now at the new price of £2.20. 

According to “this is money” there would be an increase towards London underground fares by 2%. Also Products like the zone 2-6 one day travel card will be permanently eliminated.

 Even the labour party have accused the government of penalising low- income families. Labour Party Leader Ed Miliband has stated that it is the wrong tax at the wrong time.

As lower income households usually spend a greater portion of their income on taxed products, this is clearly obvious that they are being effected a lot more by this dramatic VAT increase!

By Ismael Hinds