Financial crisis leads to austerity tax rises
The UK has increased its standard Value Added Tax rate from 17.5% to 20% from 4 January 2011. This comes as the government’s deficit has ballooned in response to bailing out several banks during the financial crisis of 2007 to 2008.
During the crisis, the then Labour government temporarily cut the VAT rate to 15% for just over one year. The new Conservative-Liberal coalition government has taken the opportunity of their election win to bring in the unpopular tax rise.
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