VAT returns to former rate

VAT returns to former rate

One of the reasons some economists think inflation will be a problem next year is that VAT goes back up to 17.5% on January 1.

The Government cut the rate to 15% in December 2008 to lower prices for consumers.

But as the rate returns to its previous level, what are the rules for people wanting to make purchases or having building work done at their home within the coming weeks? What VAT rate will they be paying?

Money Box spoke to John Whiting, Tax Policy Director, Chartered Institute of Taxation.

This item was first broadcast on Radio 4's Money Box on Saturday, 28 November 2009