Retailers made early start on VAT cuts

The Chancellor of the Exchequer recently announced that as of the start of December VAT would be coming down from 17.5 percent to 15 percent, which was another move by the government to try and increase consumer spending and confidence, boost the economy, and minimise the effects of the recession. However, some retailers decided that they could not wait that long.

According to a recent report a number of major retailers decided to apply the VAT cuts early, and the weekend before the cuts were due to take place officially a number of retailers had already cut their prices to reflect the lower VAT level in the hope of drawing in customers and boosting their sales in the run up to Christmas.

Tesco, Sainsbury’s, John Lewis, and DSG Group, which owns electrical giants such as Curry’s, Dixon’s, and PC World, all decided to slash their prices to reflect the lower VAT level shortly after the announcement by the chancellor. Many were hoping that they would benefit from increased shopping in the last weekend of the month, as consumers start buying gifts ready for Christmas.

An official from Tesco stated: ‘We know that many families will start their Christmas shopping this weekend as pay packets arrive and we don’t want customers to miss out on the cut in VAT which comes in on Monday.’