Alcohol & Tobacco: VAT savings offset
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.Those hoping the Government's decision to slash VAT rates would make it cheaper to fill up the tank, or binge on booze and cigarettes, were left disappointed yesterday.
Alistair Darling said that the reduction of VAT "lowers the amount of tax paid on tobacco, alcohol and petrol. In addition, petrol prices have come down by 7p a litre last month alone".
Rather than letting consumers enjoy the resulting savings, he added: "I will offset the VAT reduction by increasing all these duties by an amount which should keep the overall cost to consumers the same this year".
Daniel Lyons, indirect tax partner at Deloitte, said: "It seems like the Government is taxing the so-called 'bad goods'. This has been government policy for years and years. They clearly didn't want those goods to enjoy a windfall from yesterday's reduction in VAT."
The measure prompted fury from members of the UK's pub lobby, who announced their "dismay and disbelief" at the rise in duty. The British Beer and Pub Association (BBPA) said the move would put pressure on community pubs.
Mark Hastings, BBPA's director of communications, said: "It's truly staggering that struggling community pubs and brewers have been denied the tax benefit extended to the rest of the business sector through the VAT cut.
"With pubs closing at record rates and beer sales at their lowest since the Great Depression, this sector needs a fiscal stimulus just as much as the rest of the economy."
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments