VAT cut to help parents and pensioners’
PUBLISHED: 15:36 26 November 2008 | UPDATED: 10:27 12 August 2010
PENSIONERS, small businesses and parents are set to benefit according to the government s pre budget report. A cut in VAT from 17.5 per cent to
PENSIONERS, small businesses and parents are set to benefit according to the government's pre budget report.
A cut in VAT from 17.5 per cent to 15.5 per cent will benefit many people, except those who drink, smoke and drive as duty on alcohol, tobacco and petrol will be increased by 2.5 per cent to off-set the reduction.
Anyone earning over £150,000 will be hit by a rise in income tax to 45 per cent while those with children will welcome an increase in child tax credit to £150 per year and child benefit will go up to £20 per week for the first born child. Single pensioners will receive £4.55 extra per week as well as a one off £60 handout in January.
Those who receive pension credit will also benefit from an increase.
Pensioner Joe Hughes, 70, of Calverley Close, Beckenham, said: "It's better than nothing and I suppose it's in line with inflation.
"I don't want to support the government but these are strange times economically. What gets me is when Boris Johnson tries to protect the very rich, that's not fair."
Asked whether the £60 handout was welcome, he said: "Yes, that's okay. But I wonder whether the government will force us punters to spend it in the same way they are forcing banks to cut customers' interest rates more.
"I'm hoping the £250 fuel allowance will do the trick."
Small businesses will be better off from the delay in corporation tax which will no longer go up one per cent to 22 per cent in April as planned.
But Sean Randall, 40, manager of independently owned electronics store Davis of Belvedere in Station Road, Belvedere, wasn't overwhelmed by the report.
He said: "I'm not impressed at all. It's not going benefit us much.
"Business has been getting slower over the last year but we're not too worried. We work on word of mouth and our customers are very loyal.
"He would have been better cutting fuel rates, then everybody would benefit. [The government] is trying to encourage people to spend more but everyone is in debt so spending more will just get them in more trouble."
Mr Darling admitted that by 2013, public debt could be over 57 per cent of national income.