Fixing for a year at current VAT rate

sammy452

Hi 
Just a quick question if you could answer please.  If I am offered a rate to fix for a year which includes a VAT rate of 5%, will my monthly payment change when the VAT rises back up?  Thank you

Robin9

Yes  - only the net rate is fixed. 

btr30

Domestic and diminisis energy consumption has attracted a reduced VAT rate of 5% for a long time, but if it changes,VAT would be chargeable at the rate prevailing at the time of bill.

sammy452

Thank you so much

Stratus

Domestic fuel used to be zero rated for VAT but in 1993 the Conservative government applied a rate of 8% despite promising in their previous year's election manifesto not to extend the scope of VAT. The chancellor, Norman Lamont had wanted to increase the rate to the full 17.5% the following year but this was voted down in Parliament. It was Gordon Brown in the 1997 Labour government who cut the rate to the current 5%, just a few months into their term in office . As btr30 advises, the VAT applied will be what the rate is at the time the bill is generated. It would probably be more of a surprise if the rate wasn't tweaked upwards in the near future given recent expenditure.

brewerdave

Stratus said:

Domestic fuel used to be zero rated for VAT but in 1993 the Conservative government applied a rate of 8% despite promising in their previous year's election manifesto not to extend the scope of VAT. The chancellor, Norman Lamont had wanted to increase the rate to the full 17.5% the following year but this was voted down in Parliament. It was Gordon Brown in the 1997 Labour government who cut the rate to the current 5%, just a few months into their term in office . As btr30 advises, the VAT applied will be what the rate is at the time the bill is generated. It would probably be more of a surprise if the rate wasn't tweaked upwards in the near future given recent expenditure.

I'd agree but for the fact that there are already many people clamouring about fuel poverty getting much worse post Brexit. A VAT increase on fuel hits the lower paid families much, much harder than the middle classes.