The top rate of VAT, the British goods and services tax, has risen from 17.5% to its highest level of 20%, as the government looks to increase tax revenues in order to reduce debt.   Business groups have warned that retailers will be hit by the increase, while opponents of the rise say the poorest people will be hit hardest.   The government says the rise is necessary to help bring down the country's high budget deficit.   The rise of VAT is also a worry for the Bank of England.   At 3.3%, the annual rise in the consumer price index is already well above the bank's target of 2%, and analysts say the higher VAT rate is likely to push inflation towards 4% this year.   Food, children's clothing, newspapers and magazines are not subject to VAT.                                                                                                                                                                                

The Bank of England is right to be worried I think.

Further taxation was inevitable and had to be done unfortunately.  At the moment the UK Government is spending millions of pounds of tax payers money each year simply to service the deficit.

But is an increase in VAT the way to do it?  Many feel not, including in particular the retail world who believe spending will decrease significantly at a time when spending needs to increase to boost retail economy.

This is after all quite a large tax increase.  Many will simply view it as an increase of 2.5%, but this is merely the overall increase.  When the VAT is considered alone, then an increase from 17.5% to 20% is a taxation increase of 14%!

Retail experts believe everything is liable to increase in price eventually because of this, including VAT exempt items such as food due to increased transportation and storage costs.

And it is this along with potential inflation issues that is concerning the BoE.  Let's just hope the government know what they're doing.  (That'll be a first!)                                                                                                                                                                             

Same same the goverment f**k up the country and the working man has to pay How said that crime does not pay is lying has any of these ba***rds been put in prison no yet they what us to voet sod them to hell                                                                                                                                                                             

Prison seems to be the easy option anyway, get pished,riot, set fire to the place and what do the powers that be come away with, Derrr, we're going to prosecute the offenders!! jeeeeeez                                                                                                                                                                             

What has annoyed me for a VERY long time, is that even in the hardest of times in the UK we have given money away to other nations, I used to moan about this yet never knew the true figures about how much WE give away, now I don't read newspapers that much as I have Sky News, but they showed this on the a program so I visited the Express & clipped the article for you all to see, I don't know if its accurate or not, but I do know WE have been bleeding money away to other Nations for decades while WE have to make massive cuts to our own services, Don't think thats right, Sort our own money problems first before anything else, what are these Nations going to do to us IF we stopped paying this ? So why do we pay !!!!!http://www.dailyexpress.co.uk/posts...765                                                                                                                                                                             

Let's hope this does not turn into a two pronged fork, BoE having to increase Interest rates to control inflation, as well as the vat increase.                                                                                                                                                                              

@Celticsilver - we pay because we are humans and we are supposed to have a little humanity for those less fortunate than us! while we all whine about the price of fuelling the bike and the cost of our beer rocketing ...what about those who havent eaten for days and dont know where their next meal is coming from, kids dying from aids and whose parents are already dead and no welfare state to fall back on...thats what we pay for!!!   a bit of perspective required i think!                                                                                                                                                                             

Kwakgirl ..... if thats were the money went to i really dont think most folk would argue but it doesnt unfortunately :(                                                                                                                                                                              

i think you would find the majority of it does go to where its supposed to. I have a mate that is an investigator for UNHCR - she tracks any misuse of aid and i tend to believe her when she says is a small amount compared to what is given. this attitude that somehow GB should look after No1 really angers me.....we are all HUMAN BEINGS arent we? although im beginning to wonder if that actually applies to the "little englanders"!                                                                                                                                                                             

End of the day the country got itself in this state by a 'keeping up with the Joneses' mentality and the throwaway society we live in, and credit being thrust at us left right and centre whether we could afford it or not...                                                                                                                                                                             

Hi Kwakgirl, you only need to look at the amount of money that has been sent to these countries and then you have to ask where has it gone? If we do send in money then we should be there in a position to ensure it goes only to the poorest and to those really in need (wether that be via Military or civil Red Cross etc).   At the moment we give it to the relevant countries government or dictatorship to dispense / invest and we then also give to Charities to help.   I do have some humanity in me and will help when i can but i hate having the pi$$ taken.   Every country promises help and aid for whatever reason but we seem to be the ones who pay the most. Lets get a level playing field where you give what you have or can afford, we are borrowing money from other countries to give away in relief.   We might sleep better but it makes no sense.   Thats it rant over need to go and put fuel in the car.                                                                                                                                                                             

Most of the government direct aid goes thru the UN not to individual governments!!!!
                                                                                                                                                                             

We perhaps should then be tightening up on the systems and processes of the UN.   Dec. 16 (Bloomberg) -- The United Nations agency tasked with curbing nuclear proliferation may have unwittingly helped Pakistan develop its atomic-weapons program because of weak internal oversight, according to documents and interviews with three former UN scientists. The UN’s International Atomic Energy Agency provided financial and technical aid to develop Pakistan’s uranium mines and improve plutonium-producing reactors even after the country tested a nuclear weapon in 1998 in defiance of a non- proliferation treaty, IAEA documents show.
While the IAEA aid was intended for civilian nuclear power, Pakistan used uranium from the mines for weapons, said three former agency scientists with direct knowledge of the situation who asked not to be identified because they are prohibited from commenting by confidentiality agreements with the IAEA. Pakistan’s two atomic-energy plants run on fuel from China and uranium from Niger under IAEA safeguards, according to agreements with the Vienna-based agency.
I know that the article above may be an isolated incident but at what fiscal cost.                                                                                                                                                                             

Can't believe what I'm seeing here, i.e. let people starve until we're sure the cash is going to the right place!                                                                                                                                                                              

I am not saying " let people starve until we're sure the cash is going to the right place! "   I am saying let us make sure that all the money/ aid is going to the people that need it in the first instance.                                                                                                                                                                             

UNHCR is a very well respected organisation within the UN.......y'know im not even gonna argue - stick with your little englander attitude and lets hope we never find ourselves in the same boat eh! coz afterall people dying from starvation and aids really are to blame for the way the world behaves arent they!!
                                                                                                                                                                             

Give a man a fish it will feed him for a day, teach him how to fish it will feed him a lifetime                                                                                                                                                                             

think you should just go visit their website instead of quoting Bloomberg and the delightful Mr Murdoch...then maybe you would see that they dont just dish out cash but actually provide materials to start people on the road to self sufficiency!                                                                                                                                                                              

That's exactly as I see it Celtic', but I got the impression that you thought we should stop giving aid first, i.e. stop giving them aid now and BTW we're in sh*t so that would help us out too!   And lets do something about the cost of fishing while we're about it!                                                                                                                                                                              

There is no denying that the UN do a great job when allowed to but there have been occasions where the system has been abused through no fault of the UN. This unfortunately cannot be prevented.   I worked with the UN in Bosnia in 1997 and have seen some of the scams and dodges that the locals where pulling on thier own countrymen i did not agree with it then and still do not.