Firms face "costly task" following VAT cut
Commercial insurance
26th November 2008
The government's announcement of a cut in VAT by 2.5 per cent will create a "mammoth and costly task" for businesses and retailers, it has been claimed.
According to Michael Baxter, an economic analyst at Defaqto, the move will also not have a significant impact on consumers' shopping habits.
"Shops will cope, but implementing a new VAT rate in just a week will be exceptionally difficult for customers and retailers at their busiest time of year," he commented, adding: "IT system changes, replacing shelf labels and stickering-over prices on packs will be a mammoth and costly task."
Among the other measures announced in the chancellor of the exchequer's pre-budget report is a restriction on income tax personal allowances for those on incomes over £100,000 and a new higher rate of income tax for those earning more than £150,000.
Established in 1994, Defaqto is an independent financial data collection and research firm.
