Are you buying now to avoid the VAT hike?

My husband and I moved house four months ago and he wanted to take time to do the house up (needed new kitchen, bathrooms, carpets etc – house only 15 years old but had been badly neglected) but I have insisted that the work be done before the VAT hike as it will save an awful lot of money. Thankfully, he saw sense and everything will be done and paid for before the VAT goes up. I do understand that I’m maybe doing the government out of some money but as a pensioner I cannot afford the extra money.

Frankly I was already tightening my belt and the VAT rise announcement just made me tighten it even more! I shall be buying as little as I can of everything and only buying anything at all if it’s totally essential.

The one purchase I have made which is not completely essential, and in many ways against my own better judgment, was a TV, but in that I have “downsized”. I have a very good 21 year old Hitachi TV, with a 26″ screen. Sadly, ever since I introduced CFL bulbs into my home, the interference from these lamps upsets the TV and the picture sometimes disappears. This annoys me greatly as it’s rules and red tape that forced me to have these lamps and now they’re spoiled a good telly.

Anyway, that aside ….

My local independent department store, Atkinson’s, had an offer on TV’s where they are paying the VAT this week and next, so I have bought a Panasonic 22″ LED widescreen TV for £149 shelf price, with the VAT taken off at the point of purchase, making it just over £146, charged to my Atkinsons’s card which gives me 2.5% off if I pay my bill in full at the end of the month, so I’ll actually pay slightly over £145 for it.

As it comes with a 5 year guarantee and my old set may not have lasted 5 years (or it may have done another 25?) I think this is not too bad a purchase but to be honest I bought it because of the combination of discounts NOW, not to avoid the VAT next month – I’d just not have bought one at all if the offer had not been on now.

People talk of a VAT increase of 2.5 per cent but we should remember it is actually a tax rise of over 14 per cent and that we will have had a 33 per cent tax increase in little over a year. It’s quite an eye-opener to review the till receipt following the weekly household shop and see how much VAT we are paying on essentials like washing & cleaning products, toiletries & toilet tissue, and VAT-carrying foodstuffs [not true necessities, but life is bleak without them]. With interest on savings running at very low levels it seems to make sense to make forward purchases of everyday items subject to VAT and carry a good stock into the new year [so long as you can afford to, have the storage space, and do not increase consumption]. And the VAT rise is a useful trigger to make a new year resolution to be a little bit more economical with everything [without becoming a totally parsimonious meanie of course]. It’s amazing how little you need to use of many good products in order to get satisfactory [or indeed excellent] results, so as well as continuing to “make do and mend” it’s time to “make a little go a long way”. We are also reviewing our purchases of imported goods in order to redirect the spending to home production – “every little helps”. Touch of the wartime spirit here I think.