If you live in the UK and you’re thinking of buying a high price item in the near future – a new computer or new car perhaps – you should probably nip out and buy it before the New Year.
From January 4 2011, value added tax (VAT) will jump from 17.5 per cent to 20 per cent in Britain.
This means that the prices of many goods and services will increase after the New Year.
Some of the items subject to the increase are new cars and electronic devices like televisions.
But there are some items, such as children’s clothes, food, clothing, and newspapers and magazines which will be exempt.
A £15,000 car will cost £15,320 after the VAT increase, and so the increase is likely to hit our wallets badly.
After the VAT is moved up to 20 per cent, Britain will have a similar rate to other major European countries like France and Germany’s rate of VAT are 19.6 and 19 per cent respectively.
Portugal and the Czech Republic already have rates of 20 per cent.
Think ahead and save money by buying any expensive items in advance of the VAT hike.