Sales tax in Britain has just gone up to its highest ever as part of the effort to bring down the country’s huge budget deficit.
VAT – or Value Added Tax – on most goods and services has risen from 17.5 percent to 20 percent.
UK finance minister George Osborne said the alternatives – higher income or payroll taxes – would make the British economy less competitive: “I think the VAT rise is a tough, but necessary step in getting Britain back on the road to economic recovery.”
The Labour Party opposition, which was in power until May, has warned that the VAT increase will actually cost Britain more jobs.
Labour leader Ed Milliband said: “It is the wrong tax at the wrong time for our economy and for our country.”
One price comparison website calculated the rise will cost each British household the equivalent of around 610 euros a year.
Shoppers were not looking forward to the VAT rise. One said “I’m unhappy about it going up obviously, it has an impact on everything you buy.”
Another complained he would not be able to afford it on a fixed income: “It’s a lot of money, especially when you are on a pension.”
The Office for Budget Responsibility – a government watchdog – has calculated the tax increase will cut Britain’s economic output this year and next by nought point three percent.
Sales tax in Italy is also 20 percent, in France it is 19.6 percent and in Germany 19 percent.
Copyright © 2014 euronewsMore about:
- 1Eurozone economic growth feeble, but finally Greece out of recession
- 2Billionaire Warren Buffett bets on battery power with Duracell purchase
- 3European SMEs’ expertise fuelling growth in Malaysia
- 4Russian billionaire Yevtushenkov stays under house arrest over oil company purchase
- 5Willy Wonka worried as world faces chocolate shortage
- 1euronews live TV - News | euronews : the latest international news as video on demand
- 2Sweden becomes first EU country to recognise the Palestinian State | euronews, world news
- 3Italy swamped by flash floods | euronews, world news
- 4Back to School for Romania’s new First Lady | euronews, world news
- 5Turkish president Erdogan unveils his new palace of a thousand rooms | euronews, world news
- 6India PM Modi appoints Yoga minister | euronews, world news
- 7[Live] Rosetta’s Philae lands on comet 67P and enters the history books | euronews, world news
- 8Vladimir Putin most powerful man in the world – Forbes | euronews, world news
- 9European e-revolution people rise up | euronews, world news
- 10International tv news | euronews: European and International tv news bulletin
- 11Revealed: Europe’s capital cities where it’s hardest to be a foreigner | euronews, world news
- 12Where is the best place in Europe for women? | euronews, world news
- 13Nadia Comaneci: gymnast of perfection and defector | euronews, the global conversation
- 14Putin plans to leave G20 talks early amid Ukraine pressure | euronews, world news
- 15Philippe Starck: ‘Words like longevity and legacy have become almost avant-garde’ | euronews, the global conversation
- 16US says ISIL makes $1 million-a-day selling oil – even to enemies | euronews, world news
- 17International news | euronews, latest international news
- 18Syria: Islamic extremists pledge to press ahead with battle for Kobani | euronews, world news
- 19World news video | euronews the latest world news online | breaking world news video
- 20US-Iranian reporter to be freed or pardoned ‘in less than a month’ | euronews, world news
Wires > Business
- 21:02 CET UK concedes defeat in bid to block EU bank bonus limit
- 21:00 CET Cinven, ABRY ready final bids for KKR’s Northgate unit – sources
- 20:48 CET Gross tweets he’s ‘honored’ to manage $500 million account for…
- 20:41 CET Senators slam industry’s response to ‘live grenade’ air bags
- 20:39 CET Goldman prepares to rebut Senate probe in Levin’s committee…
- 20:36 CET Gross tweets he’s ‘honored’ to manage $500 million account for…
- 20:30 CET Britain withdraws legal challenge to EU bank bonus cap
- 20:17 CET Tenacious Brazilian judge oversees deepening Petrobras probe