Secret 18.5 percent VAT plan in UK denied

by Dave Keating | November 26, 2008 at 02:04 am

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The UK government has denied that it has plans to raise the Value Added Tax (sales tax) to 18.5 percent if it wins the next election. A document purporting to describe the plan was published on the internet.

It seems unlikely that the government would actually have such plans, since they are about to impose a variety of measures designed to encourage consumers to increase their spending.

The government has denied it has a secret plan to raise Value Added Tax to 18.5 percent following the next election after it published a document apparently detailing the rise on the Internet.

The Conservatives said the memorandum had revealed Prime Minister Gordon Brown's "secret tax bombshell."

But Treasury Secretary Angela Eagle said its publication was a simple mistake and accused the Conservatives of scaremongering.

Chancellor Alistair Darling on Monday announced a 2.5 percent point cut in VAT to 15 percent as part of his pre-budget plans to pump 20 billion pounds into the economy to avoid a steep recession.