Still reeling from the Pre Budget report, I opened my email last night to find a copy of this enclosed from an official Treasury briefing note.
"VAT is a tax on the final consumption of goods and services, collected at every stage of
production and distribution. It is charged on the majority of goods and services at the
standard rate of 17.5%. The proposed changes will reduce this to 15% from 1 December
2008 until the end of 2009. The standard rate will then return to 17.5% from 1 January
2010, and subsequently increase to 18.5% in 2011-12."
Clearly this was no "mistake" by the Treasury. The hidden tax bomb - well that is something that you will have to decide for yourself. The Government has to repay the enormous and irresponsible debt it is going to mortgage the nation for. It is also clear that the burden will fall on taxpayers who will have to pay it back. I suspect this is one of a number of hidden tax increases. All the previous estimates as to how much the Government has to borrrow have proved wrong, so why should any of us trust them when they say they "dismissed" this as an option. Hmmn well just how are they going to pay the unaccounted for £100 billion black hole in their current estimates? Needless to say I forwarded the entire document to the Chester Chronicle and the Flintshire Evening Leader last night, probably the only time that they have got a National front page story from me before the news had broken. As with so many policies coming from this Government this potential change will hit those on lowest incomes the hardest, and will make Flintshire businesses less able to compete in the world economy - apparently when we will be emerging from this devastating recession.