history of vat

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Dave G | 18:03 Mon 24th Nov 2008 | Business & Finance
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Does anyone know the history of UK VAT as I believe that there was an increase just post the POLL TAX repeal that was originaly stated short term, I can't remember all the rates and the dates
I know it started on April fools day 1973 and I can remember thinking that's another tax con
seems I might have been right as it is proposed that VAT will be increased to 22.5 % in 2010
any way, any help ,web page or details will be gratefully recieved
David G


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Started at 8% I recall then 10%. Went to 15% under Gordon Howe (I recall) in return for income tax cuts. Then raised to 17.5% by Lawson or Lamont (Lamont I think) to cover the cost of abolishing the poll tax, but I don't recall that was ever announced as temporary.
incidentally, the 2.5% cut announced today doesn't mean prices should fall 2.5% as the cut is 2.5% of the gross price of 117.5%, which works out at 2.1%
Scroll down to the last post on here _rules_smbs/comments/

I don't know where they got their information from, but I do remember VAT going up by 2 1/2 per cent in about 1980, so it looks right.
VAT (a requirement for membership of the EEC) replaced Purchase Tax (a "temporary" tax introduced in 1940 to curb spending during WW2 and aimed primarily at luxuries) and Selective Employment Tax (introduced in 1966 to increase employers' labour costs for 'non-productive' staff).

VAT started at a single Standard Rate of 10% but quickly decreased to 8% while acquiring a second tier Higher Rate of 25%. In 1976 the rates became SR 8% and HR 12�% plus the introduction of Zero Rate.

Geoffrey Howe consolidated VAT to the single SR of 15% in 1979 which lasted until Norman Lamont's 1991 "Poll Tax alleviator" raise to 17�%.

Kenneth Clarke introduced the Reduced Rate of 8% in 1994, which Gordon Brown decreased to 5% in 1997.

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