Further Information
Taxation
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Policies & Issues: Taxation
VAT
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Recent policy developments in the area of VAT have been a key focus of activity for the BRC Tax PAG, including the temporary VAT reduction and changes arising from the EU 2010 VAT Package.
In PBR 2008, the Government announced a temporary reduction in the standard VAT rate to 15%, which created particular challenges for the retail sector in having to update pricing displays on a very short timescale. In advance of the reintroduction of the standard VAT rate on 1 January 2010, the Government listened to retailers' concerns about the enforcement regime which applied at the time of the increase and agreed to amend the Price Marking Order to give retailers 28 days to amend in-store pricing displays, rather than the 14 days previously allowed.
The issue of VAT is likely to be a key focus once again following the General Election. The current fiscal deficit has focused attention on VAT as a possible means of reducing the shortfall. Any increase above the current standard rate of 17.5% would have a significant adverse impact on consumers and retailers alike. The BRC would not support an increase in VAT beyond the current rate.
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