Buy now to avoid VAT hike on 1 JanuaryStandard VAT rate goes back up to 17.5% from 1 Jan

26 December 2009

You can avoid the rise in VAT on 1 January 2010 by hitting the sales early.

VAT is due to rise from 15% to 17.5% from 1 January 2010, marking the end of the Chancellor's 13-month temporary reduction in the tax.

Some stores are delaying the VAT rise. For instance, John Lewis, will delay it until the end of January. However, most shops will be reintroducing the 17.5% from New Year's Day, so if you're looking for a bargain, you could save money by visiting the sales before the end of the year.

VAT rise 

While it's not a huge increase, the extra VAT payable from 1 January will soon add up. For example, a computer costing £500 (including VAT) before 1 January, will go up to £511 after that date.

The price of goods that don't incur the standard rate of VAT will be unaffected by the change in the headline rate. These include:

  • zero-rated goods – for example, most foods, children’s clothing and books
  • reduced-rated items – for example, child car seats and domestic supplies of fuel
  • Exempt goods and services – for example, education, health and financial services

Find the best January sale bargains with Which? shopping guides

To find the best household gadget deals, check out the .

If you're looking for the best deals on clothes and accessories, our guide to the top offers from leading brands and shops is the one you need.

And for more hi-tech purchases in the January sales, our will help you bag a bargain.

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