VAT is 20% across the board whether you are rich or destitute. The argument that you do not have to pay the tax unless you spend is flawed as the tax is applied to electricity, gas and other necessary items.
VAT was introduced in the UK in 1973 and has remained a money-spinner for successive British governments. These days the EU has some input as "under EU law, the standard rate of VAT in any EU state cannot be lower than 15%."
Prior 1973, and from 1940, a purchase tax was in place in the UK. This tax was applied at manufacture and in 1973 stood at 25%.
In 1973 a Tory minister set UK VAT at 10% as it was introduced but this was reduced by Labour a year later to 8%. To balance the books Labour introduced other tax measures.
What attracts VAT is crucial
There are currently three rates of VAT: standard (20%), reduced (5%) and zero (0%). In addition some goods and services are exempt from VAT or outside the VAT system.
Included in the exempt list are:
The list of goods attracting a reduced rate is;
VAT is obviously here to stay but how it is applied and its rate can be crippling to those on a fixed income, the elderly, the poor and the vulnerable of the UK.
As election campaigners promise voters the earth balancing the books post May 2015 will be tricky. Only Labour have made a pledge that VAT will not increase.
Wednesday during the last PMQT in the Commons before the election Ed Miliband fell into what appeared to be a VAT trap as David Cameron 'ruled out' an increase in VAT if he is re-elected. But with a track record of lies, broken promises and U Turns Cameron's words are meaningless.
The noise and abuse coming from the Tory benches was embarrassing and as usual the speaker failed to hold any of the fools to account and ensure that Cameron answered any questions. The session is called Prime Minister's Question Time but Cameron simply used the time for electioneering and propaganda.
The Tories are looking at cutting £12 billion from the welfare budget if they are elected in May 2015 but as yet have failed to explain where the austerity axe will fall and who will feel the financial pain.