At FinSol Tax Advisors our Accountants in Stanmore provides a wide range of accountancy services including tax returns, payroll , bookkeeping and annual accounts.
Value added tax:
The most dramatic shift in revenue-raising over the last 35 years has been the growth in VAT, which has doubled its share of total tax revenue. The bulk of this change occurred in 1979, when the incoming Conservative government raised the standard rate of VAT from 8% to 15%, to pay for reductions in the basic rate and higher rates of income tax. The rate was increased from 15% to 17.5% in 1991, to pay for a reduction in the community charge (poll tax), and then again from 17.5% to 20% in January 2011 as part of the coalition government’s deficit reduction package.
There have been a number of (mostly minor) extensions to the base of VAT over the years. Perhaps the most significant was the extension of VAT to cover domestic fuel and power from April 1994, then at a reduced rate of 8%. The original intention was to increase this to the full rate (then 17.5%) a year later, but this second stage of reform was abandoned in the face of fierce political opposition. In fact, the reduced rate was cut from 8% to 5% in 1997, fulfilling a pre-election promise by the Labour Party. The reduced rate has since been extended to cover a few other goods that were previously subject to VAT at the standard rate.
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