Beat the VAT Rise

VAT rises from 17.5% to 20% in just a few days, on January 4th - so if you have any expensive purchases planned, it may be best to order them before that date.

Many items for children and babies are exempt from VAT, including clothes, shoes, books, most foods, nappies and nursery fees.  However, many other essentials are not exempt, such as cots, beds, toys, prams, car seats, playpens, stair gates etc.

The rise from 17.5% to 20% will add around £2.13 for every £100 spent.  That doesn't seem like a huge amount, but over a year this will add up.  Various organisations have estimated the extra cost this will add to families' annual spend and those estimates range between £150 and £500 per year, with the majority around the £400 price mark. Worse than that, there has been much speculation in the press that retailers will increase prices beyond the simple VAT rise and that we'll see a noticeable price rise over the period.

If you are planning any expensive purchases over the coming months then there are still a few days to beat the VAT rise.  If you don't have time to get to the shops, then you can buy products online.  VAT officially rises on 4th January so purchases made up until the 3rd January should be at the lower rate, and before any additional price rises are applied.  However, some websites do not charge for goods until the point of dispatch rather than at the point the order is taken, so beware that even though you may be buying in time to beat the rise, you may yet find that you are eventually charged the higher rate.  Check terms at individual websites and read confirmation emails carefully to make sure!