Good news! UK VAT rate may be reduced to 15%

Breaking news! The UK VAT rate may be reduced.

According to foreign media reports, British Prime Minister Johnson's office said that Johnson will announce the latest "de-lockdown" plan on June 23, and will officially let the UK enter the third phase of de-lockdown on July 4 to fully restart the economy.

The report further pointed out that although British stores and shopping malls have been fully opened, their turnover is still only about 40% of the usual level. For this reason, the British government is still planning a tax cut, and Chancellor of the Exchequer Sunak is likely to announce a reduction in value-added tax (VAT) from the current 20% to 17% or even 15% .

According to multiple British media reports, in order to stimulate economic recovery, Sunak plans to announce early next month that he will reduce VAT and business tax!

Helen Dickinson, chief executive of the British Retail Consortium, said: "Temporarily reducing VAT and reducing income tax for low-income people will effectively increase consumption." Although this will significantly reduce government fiscal revenue and further increase government debt, it will also allow companies to retain more income to support their financial situation. The VAT plan is still under discussion.

Former Chancellor of the Exchequer Sajid Javid, who stepped down in February this year, also called on the government to cut VAT, saying that if VAT was reduced from 20% to 17%, the cost to the government might reach 21 billion pounds, but doing so would promote consumption, increase jobs and allow the UK economy to turbocharge growth.

Such opportunities are rare. Since the government last raised VAT in 2011, VAT has remained at a high level of 20%. The last time the government announced a VAT cut was during the financial crisis in 2008, when the government reduced the VAT rate from 17.5% to 15% to stimulate the recovery of the UK economy.