Friday 4 February 2022

Government to Slash VAT?

In the latest murmurings Deadbeat hears VAT is getting a shake up. Domestic utility bills which are being hit by energy price rises may benefit shortly by the reduction of VAT as well as businesses. With inflation running out of control government is daft not to be considering one of the bluntest levers available to it. Slashing VAT and reclassifying certain products will help industry, in particular hsopitality, enormously. Pub landlords and restaurant chains know the amount of VAT they pay and of course it is all handed onto their customers. What most punters dont realise when quaffing their £6 beer is £1 of it is VAT. Government knows that more people are drinking at home after lockdown so hospitality has hit one of those cobweb cycles of increasing prices to maintain jobs and turnover. So will the government take this populist move? As short term deflation goes it hits the spot. Hospitality is a headache for them as we emerge from Covid and they know how much small business meets over dinner and pints. Do they want to encourage people to party, why of course they do. Reclasssifying or zero rating could be an easy, simplistic jump out the hole they find themselves in. Zero rating utilities for domestic users is so simplistic its already in a song but I'm saying nothing, becasue nothing always happens! Or then again, nothing ever happens....