VAT is expected to rise under the new Conservative & Liberal Democrat coalition government, according to a survey of influential economists. 24 of the 28 independent economists surveyed by the Treasury, 24 expected the rate to rise.
Raising VAT to 20% would bring in an extra £11.5bn a year according to Analysts. VAT was temporarily cut in 2009 to 15% to aid the recovery of the economy. It is now expected to rise from the existing 17.5% to 20% before the end of 2011.
An emergency budget is expected in the next 50 days which is expected to include any changes to VAT and other taxes. VAT on consumer good is seen as an effective way of boosting the government’s tax income.
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