V.A.T. - Vaguely Adjusted Tax
Dec 3rd, 2008 by Jamie Bradley
As I walk around the supermarkets, I find myself being greeted with an array of obscure pricings, with most items on the shelf coming with price tags exact to the penny. Gone the days of the conventional 1p less the pound prices, at least it seems that way for now.
Although more cost effective for us, the consumer, the extra change in the pocket comes as more of an annoyance than a cash relief. This 13 month plan to reduce value added tax by 2.5% seems to be nothing more than a futile way of the government offering condolences to all of us who are feeling the financial pressures imposed on us because of the recession.
As I approach the till to pay for my £35 weekly shop, I began to ask myself whether the grand total saving of 87p is really enough to help me in any way overcome this financial predicament that a lot of us find ourselves in as of recently.
Over a 13 month period, a dedicated ‘penny jar saver’ would bag a seemingly impressive windfall that amounts to just short of £49, probably just enough to turn those supermarket essentials into luxury one-offs for one week only.
But more importantly, how much of an impact will this have on the government’s annual budget spending? Not only that, does this mean that in order for the government to recoup those losses that there will be inflation in VAT at the end of this preliminary time period?
The only beneficiaries, in my opinion, are big retail companies, which make such a substantial amount of profit on an annual basis that this recession would do little to hinder the quality lifestyle that these company directors have anyway.
Furthermore, it has come to my attention that fashion designers such as; River Island, House of Fraser, Next and Topman have neglected their duty to offer products at a reduced rate in aid of the struggling last minute Christmas shopper and continue to sell at November’s early bird prices, albeit a minimal reduction at that.
Instead of subsidising the government with additional taxations, it would seem the large, high profit companies are raking in the excess to compensate for the decline in sales due to the credit crunch, while other retailers are committed to helping us pay off our seemingly endless debts, 87p at a time.
By Jamie Bradley
