- Thursday, 24 June 2010The VAT rise announced in the emergency Budget on June 22nd should not affect consumer confidence too much as retailers will make offers to appeal to customers.
That is according to Andrew Hagger, a spokesperson from Moneynet, who also believes the rise will not negatively affect consumers.
A rise in VAT could lead to consumers having less money to put towards a
debt management plan as the cost of living may increase.
Mr Hagger said: "Retailers might do promotions where they don't charge the extra VAT, or something.
"That could be a way of them shaking up the competition. I think they will make some kind of play on it. In any case I don't think it is going to be too catastrophic."
However, he did warn that it could affect some more than others as the Budget also capped housing benefit and abolished child tax credits.
The UK Treasury announced on June 22nd that from January 4th next year, the main rate of VAT will rise from 17.5 per cent to 20 per cent.
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