Government urged to delay VAT increase

Retailers are urging Chancellor Alistair Darling to delay the increase in VAT scheduled for December.

The Chancellor reduced VAT from 17.5% to 15% in the 2008 Pre-Budget Report, in a bid to boost consumer spending. The higher rate is due to be reinstated on 31 December.

However, the British Retail Consortium (BRC) is arguing that the planned increase will come at the busiest time of the year, and will cost retailers around £90 million to implement.

The organisation has called for the reintroduction to be delayed until at least February 2010.

Stephen Robertson, Director General of the BRC, said, 'Changing VAT rates back to 17.5% at the end of December will soak up a lot of effort at the busiest and most important time of year for most retailers. For some shops post-Christmas sales are 50% above normal – so it's a time when staff should be focusing on serving customers'.

The BRC has also called for a number of other measures to help businesses, including an immediate freeze on all new business rate burdens, and a reintroduction of empty property rate relief.