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Britons race to beat the January VAT rise

Britons race to beat the January VAT rise

Category: Money

Updated: 08/12/2010
First Published: 08/12/2010

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Millions of Britons intend to hit the UK 's high streets in the coming weeks in a bid to beat the impending rise in VAT.

The rate of VAT is set to increase from 17.5% to 20% on New Year's Day 2011, as part of the Government's effort to pay down some of the country's colossal debts.

More than a quarter of adults said they intended to go on a shopping spree in the next few weeks to beat the increase, research conducted by Santander found.

It means that more than 13.75 million people will set cash registers ringing, with the average consumer expected to splash out around £650.

People living in the South East of England are set to go on the biggest splurge and expect to spend approximately £840 on average.

Those in the North East are the most frugal by comparison, and plan an average outlay of just under £360 each.

However, research also reveals that many consumers are unaware that the standard rate of VAT will increase from 17.5% to 20%.

This rises to 16% of 18 to 34 year olds.

Electronic items, such as iPods, iPads, mobile phones and TVs, are the most popular items for pre-VAT hike spending sprees, earmarked by 42% of consumers. This is followed by adult clothes (29%) and alcohol (26%).

Big ticket items such as furniture, and white goods are also expected to be purchased on large scale before VAT is increased.

The combination of this last minute pre-VAT hike spending, Christmas presents and other new items bought for the festive season means that the average household expects the value of goods in their home over this period to increase by a massive £1,700.

If you're planning on a seasonal shopping spree you may want to check your house insurance covers the value of all your new purchases.

If you are without a policy, you should act fast as failure to act could result in a quite miserable Christmas.

Moneyfacts.co.uk has teamed up with Beatthatquote.com to help you find a home insurance cover that suits your needs.

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

 
 
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