When is a tax not a tax?

The answer seems to be when it is VAT, according to Tories. And they’re likely to increase it if they get re-elected to government.

You’d think that the clue was in the name – Value Added Tax. But I keep hearing claims that the Tories have taken lower paid people out of tax.

Well, that is all very well, but people on low pay are much more affected by VAT than by income tax. The first thing the Tories did when they came to power in 2010 was to hike the VAT rate to 20%. Of course, before the election, they said they had “no plans to increase VAT”. This time, they just aren’t saying anything, so expect a rise.

Even the most badly paid contribute a significant part of the hard earned cash as VAT. But increasing the income tax personal allowance gives most money to the people who pay higher rates of tax. When it comes down to the worst paid, the less you earn, the less you benefit from a change in the personal allowance.

So let’s hear less about taking people out of tax, and let’s hear a commitment to freezing or reducing VAT, the tax that bears hardest on the poorest.

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