How much is the Treasury making on extra 2.5% VAT?

19 March, 2010

Q The government has

reinstated VAT on alcoholic drinks to 17.5%. Has anyone calculated

how much this will raise for public finances???A Yes – the Treasury. It estimates the benefit to the Exchequer for the remainder of this tax year (calendar months of January, February and March) will be £160 million, although this presumably assumes sales are not harmed by the price increase – where it is passed on.

So over 12 months the figure would be four times that, £640 million.




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