Some ways to beat the VAT rise

The VAT rise in the UK from 17.5% to 20% on 4 January has caused much debate, not least among politicians who love to blame each other for this sort of thing. Yet, many people – now exhausted by rising prices, budget deficits, and endless tax increases – appear to find it shruggingly boring.

Nevertheless, although an increase of 2.5% on some goods may not seem much on a single item, it is sensible to do all you can to avoid the tax increase.

For example, wouldn’t it have been a false economy to dash out and by a TV at the back end of December to beat the rise – only to realise that you didn’t really need a 50” screen to replace your 42” anyway?

There are some things that are exempt from VAT, or have a lower rate. Why not invest your money in some of those items? Here are some examples.

You could cut the cost of warming your home by insulating it. Insulation materials have a VAT rate of only 5%.

If you smoke it is best to stop anyway – for your health and your budget. It’s not easy, so you could be helped on your way by using nicotine patches, which have a discounted VAT rate.

Some foods are VAT taxed, but they’re mostly processed food. By eating fresh fruit and vegetables, you will not only eat more healthily, you will also save on VAT. In addition, if you eat at home rather than out, you will save on restaurant VAT.

Second hand goods are good. Only new items are subject to VAT, so you’ll be saving by buying used goods.

Words are cheap – well, cheaper, at least. There is no VAT on books, magazines or newspapers, so forget about the big TV, switch off and read more.

One odd one – if you’d like to buy or rent a helicopter – do so! These are, bizarrely, exempt from VAT.

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