Today marks the day when the rate of VAT increases from 17.5% to 20%, leading to higher prices in a lot of goods and services we buy. Some goods remain exempt such as food and childrens clothes. The Coalition government argue that it will raise £12 billion which will help reduce the budget deficit whereas opponents argue that it is a regressive tax increase which punishes the poor and risks destabilising the weak recovery.
Here are some interesting articles from the BBC website which are well worth a look:
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