26 June 2010

Much ado about not very much

The dust has settled on Tuesday’s Budget, but just like a thunder in a storm that has passed, the noise about the increase in VAT still rumbles on.

The VAT increase could hardly have come like a bolt out of the blue - that would be like expecting the Sun not to start an anti-German rant the moment it became obvious that the less than brilliant start to the 2010 World Cup by “Our Brave Boys” meant the England team would meet its Nemesis sooner rather than later.

When VAT was reduced by 2.5% last year, the cry went up that it was not enough to make a difference, so why should an increase of 2.5% mean the end is nigh? On a typical DIY five grand plus VAT kitchen or bathroom, that’s an extra £125, and on a £20,000 + VAT project it’s an extra £500.

Lower energy appliances will save over £500 in energy consumption during their working lives so this could be an opportunity to trade up rather than to run for the hills.

I’m not suggesting that a VAT increase in January 2011 will be the shot-in-the-arm that KBB-Land was looking for, but it’s not "the end of the world as we know it" either.

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