VAT returns to 17.5% on New Year’s Eve, but many retailers are not intending to pass on the increase immediately.
The rate was cut last December as part of the government’s attempts to stimulate the economy, but the timing of the return to 17.5% is inconvenient for many retailers coming both on New Year’s Eve and in the middle of their post-Christmas Sales.
John Lewis, Argos, Tesco, Asda and Sainsbury’s are among the retailers which are delaying the increase, for varying periods of time. Marks & Spencer plans to implement the increase immediately on general merchandise and from January 11 on those food products on which VAT is applied.
The government has relaxed rules on price labelling to give retailers four weeks to reprice products in stores.