View more on these topics

Tories deny plans to hike VAT to 20 per cent

The Conservatives have moved quickly to quash reports that the party will increase VAT to 20 per cent if they get into power at the next election.

Reports over the weekend suggested that plans for an emergency budget are being drawn up to pull the UK out of debt and that these included a hike in VAT which would take place within weeks of a Tory victory.

If such a proposal went ahead, it could raise up to £10bn a year but the Tories denied this yesterday saying that there had been no discussions about this at a senior level.

Speaking on Sky News, shadow foreign secretary William Hague said: “There are no plans in existence in the Conservative party for such a VAT rate and you can’t ask George Osborne to write the 2010 budget now, given the shocking state of the nation’s finances.”

BDO Stoy Hayward head of VAT Marc Welby says: “I don’t believe anyone should be surprised if the VAT rate is increased – the budget deficit needs to be addressed and there is a limit, at least in the short term, as to how quickly costs can be cut.

“With most commentators considering that the case for raising taxes in the medium term has now been established the only remaining questions are which taxes and by how much.

“VAT is, perhaps, an obvious candidate as it would raise substantial revenues and a VAT rate of 20 per cent would bring the UK closer to the EU average of 19.5 per cent.”

Chancellor Alistair Darling temporarily cut VAT from 17.5 per cent to 15 per cent in last year’s pre-Budget report in a bid to boost spending – a move that is due to end on January 1 next year.

Recommended

Platform reviews aid IFA choice

Platforum has launched a service for IFAs to anonymously review platforms in order to help other advisers in their wrap selection process.

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com