VAT rate rise surprise
December 4th, 2009 by Richard Aucock
VAT rate increases in 2010 will come as a complete surprise to 12 million Britons says Auto Trader.
The shock lack of knowledge over the increase in VAT, from today’s rate of 15 percent, will have a big effect on spending habits.
30 percent have said that the rise in VAT to 17.5 percent (or, possibly, even more) will have a real impact – particularly for big ticket items such as cars.
The effect of this will be magnified yet further by the ending of scrappage in February!
Surprisingly, more than half of those planning an expensive purchase in the next few months say they are NOT planning to bring forward their purchase. This is undoubtedly because they do not know VAT is going up.
But will the shock of the big rise force them to reconsider their decision altogether? That’s the real concern of many car dealers with an eye on 2010 sales.
Matt Thompson, marketing director at Auto Trader, said it would thus be a good idea for car dealers to suggest buyers buy before the festive season.
‘The impending rise in VAT and the end of the car scrappage scheme make a compelling case for bringing car purchases forward to before Christmas.’
As for the increase itself, Auto Trader’s findings suggest the public thinks it will backfire on the Government in the long run. A quarter reckon it will be harder for the UK to emerge from recession as a result.
1 in 10 also expect the VAT rate will increase to 20 percent…
What’s your view on the risks next year’s VAT rise presents to car dealers, and how are you getting round them?
Scrappage sales will not be changed
Car dealer renews scrappage blast
Tags: auto trader, government, VAT