Tesco announced today it is planning to freeze VAT on thousands of products into the new year.

The UK’s biggest retailer said the move would save customers £12m, although it said the duration of the freeze would vary between individual lines and it did not specify how long it would last.

The freeze mostly affects Tesco’s non-food lines, as most food products are VAT-exempt.

Retailers are adopting varying strategies to deal with the January 1 VAT rise, when the rate returns to 17.5% after a one year cut to 15%.

Argos is waiting until its new catalogue at the end of January to put the rate back up, and other retailers such as John Lewis will also be deferring the increase.