Retailers skirt around VAT return to 17.5%

VAT returned to its 17.5% level on New Year’s Eve, but major retailers are proving reluctant to be seen passing the additional tax on to customers.

According to a report in the Daily Telegraph, major names such as Tesco and Morrisons have put up prices over the past couple of months to allow them to say that they are not handing on the increase. John Lewis is one of several retailers delaying passing it on.

Retailers complained last year that the timing of the re-establishment of VAT to its normal level would be detrimental to business as it falls in the New Year sales period.