The VAT Bombshell

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Well we knew it was coming. With the new coalition government in place there had to be an increase somewhere in taxes to try and tackle Britain’s £178 billion deficit. With George Osborne, in his Budget speech, confirming that there will be a rise in VAT from 17.5% to 20%, we will now see an extra £13 billion a year raised. We know the financial markets want to see signs that the deficit is being tackled, but what will the real impact be to the economy?
With the Budget focusing on the Private Sector securing economic recovery how much of an affect will the VAT increase have on businesses, including SME’s where the increase burden of VAT may have an impact on cash flow? Will the VAT increase dampen any enthusiasm for an economic recovery? We would like to hear your thoughts

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