Rise in VAT 'could be psychologically damaging'
It has been announced that VAT is set to rise again, following its holiday.
During the pre-Budget report last week, Chancellor of the Exchequer Alistair Darling announced VAT will return to 17.5 per cent on January 1st 2010, from the 15 per cent it has stood at in recent months.
Mr Darling stated the VAT holiday has resulted in savings of £11 billion for both consumers and retailers.
However, Mark O'Sullivan, director of dealing for Currencies Direct, said the forthcoming rise in VAT could be "psychologically damaging" for consumers.
"I don't think VAT is going to be that major, because when you ask any person on the street it might not register, but it's the psychological thing - it's going up, rather than going down," he explained.
Britons concerned about a further financial pressure during the recession may wish to consider flats to rent in Wandsworth or another part of London.
This is because renting a property in the capital is likely to be far cheaper than buying a home, with rent less likely to be effected by tax hikes.
Written by Ben Carter
Published 15th December, 2009
© 2009 Estates IT Limited
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The VAT holiday is set to end in a few weeks, which could have "psychologically damaging" effects for some Britons, it is said - although renting a home may help ease some of the financial pressure.