Stores raise prices before VAT change

Some high street stores have raised prices ahead of January's VAT hike while pledging not to pass the tax increase on to customers immediately, it was reported today.

Retailers including Tesco and Boots have increased the prices of certain items in recent weeks, according to the Daily Mail.

The moves come as consumers face a raft of different approaches to the hike in VAT, which returns to 17.5 per cent tomorrow.

A number of high street chains are delaying price increases, while others are imposing them only on certain items and some retailers have not stated what they plan to do.

Tesco has pledged to freeze VAT on many non-food items, adding up to a projected £12 million in savings for customers.

It is understood that the supermarket increased the price of 1,577 items - around 6.3 per cent of its range - this month.

The increases are thought to include 500 products that are subject to VAT, including bedding, cooking equipment and crockery.

Tesco told the Daily Mail that the price changes had "no link whatsoever" to the increase in VAT.

It is thought that Boots has increased the price of more than 1,500 product lines by an average of 2 per cent in recent weeks.

The retailer said it would "gradually increase" the prices it charged during the early part of the year to reflect the higher tax.

A spokeswoman for Boots UK said: "We believe our customers want great value at this time of the year and we are offering a fantastic January sale with discounts of up to 50 per cent off a wide selection of products."

VAT was cut to 15 per cent in December last year as the Government tried to drive up consumer spending in the face of the economic downturn.

The centre for economics and business research estimates that the VAT cut helped boost spending by £6.8 billion, but it has warned that retailers could face a tough spring because of the increased tax and rising inflation.

Sir Philip Green has said all of his Arcadia Group stores - including Top Shop, Dorothy Perkins and Miss Selfridge - will absorb the cost of the VAT increase.

Argos plans to delay any price increases until the end of January, when its new catalogue is published, minimising the costs associated with the change.

But its fellow Home Retail Group firm Homebase has said it will be raising VAT on all its goods from the beginning of January, although it said that because the tax was only one element of pricing, the increase was not likely to be immediately evident.

Marks & Spencer is also planning to raise prices in line with the tax hike as soon as it becomes effective on all general merchandise. Food items that attract VAT will increase in price from January 11.

In a statement, Tesco said: "We work hard to keep prices down for customers, which is why we have frozen VAT on thousands of products at the lower rate of 15 per cent. This is on top of 5,000 price cuts over the last two weeks, with average reductions of over 10 per cent.

"A small proportion of products will have increased in price but this is either because of special offers coming to an end or an increase in the cost price. Many more prices have fallen than increased and overall consumers continue to get a great deal."

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

Teeth should be brushed twice a day to prevent tooth decay
Bryan Cranston as Walter White, in the acclaimed series 'Breaking Bad'
footballChelsea 6 Maribor 0: Blues warm up for Premier League showdown with stroll in Champions League - but Mourinho is short of strikers
Those who were encouraged to walk in a happy manner remembered less negative words
Arts and Entertainment
Princess Olga in 'You Can't Get the Staff'
tvReview: The anachronistic aristocrats, it seemed, were just happy to have some attention
Renee Zellweger as Bridget Jones
Life and Style

Board creates magnetic field to achieve lift

There have been various incidents of social media users inadvertently flouting the law

Life and Style
Stack ‘em high?: quantity doesn’t always trump quality, as Friends of the Earth can testify
techThe proliferation of online petitions allows us to register our protests at the touch of a button. But do they change anything?
Bourgogne wine maker Laboure-Roi vice president Thibault Garin (L) offers the company's 2013 Beaujolais Nouveau wine to the guest in the wine spa at the Hakone Yunessun spa resort facilities in Hakone town, Kanagawa prefecture, some 100-kilometre west of Tokyo
CSKA Moscow celebrate after equalising with a late penalty
footballCSKA Moscow 2 Manchester City 2: Premier League champions let two goal lead slip in Russia
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Helpdesk Analyst

    £23000 per annum + pension and 22 days holiday: Ashdown Group: An established ...

    Senior Helpdesk Analyst / Service Desk Co-ordinator

    £27000 per annum + pension, 22 days holiday: Ashdown Group: An established ind...

    Senior Pensions Administrator

    £23000 - £26000 Per Annum: Clearwater People Solutions Ltd: Our client is curr...

    Corporate Actions Administrator / Operations Administrator

    £25 - 30k: Guru Careers: A Corporate Actions Administrator / Operations Admini...

    Day In a Page

    Indiana serial killer? Man arrested for murdering teenage prostitute confesses to six other murders - and police fear there could be many more

    A new American serial killer?

    Police fear man arrested for murder of teen prostitute could be responsible for killing spree dating back 20 years
    Sweetie, the fake 10-year-old girl designed to catch online predators, claims her first scalp

    Sting to trap paedophiles may not carry weight in UK courts

    Computer image of ‘Sweetie’ represented entrapment, experts say
    Fukushima nuclear crisis: Evacuees still stuck in cramped emergency housing three years on - and may never return home

    Return to Fukushima – a land they will never call home again

    Evacuees still stuck in cramped emergency housing three years on from nuclear disaster
    Wildlife Photographer of the Year: Intimate image of resting lions claims top prize

    Wildlife Photographer of the Year

    Intimate image of resting lions claims top prize
    Online petitions: Sign here to change the world

    Want to change the world? Just sign here

    The proliferation of online petitions allows us to register our protests at the touch of a button. But do they change anything?
    Ed Sheeran hits back after being labelled too boring to headline festivals

    'You need me, I don’t need you'

    Ed Sheeran hits back after being labelled too boring to headline festivals
    How to Get Away with Murder: Shonda Rhimes reinvents the legal drama

    How to Get Away with Murder

    Shonda Rhimes reinvents the legal drama
    A cup of tea is every worker's right

    Hard to swallow

    Three hospitals in Leicester have banned their staff from drinking tea and coffee in public areas. Christopher Hirst explains why he thinks that a cuppa is every worker's right
    Which animals are nearly extinct?

    Which animals are nearly extinct?

    Conservationists in Kenya are in mourning after the death of a white northern rhino, which has left the species with a single male. These are the other species on the brink
    12 best children's shoes

    Perfect for leaf-kicking: 12 best children's shoes

    Find footwear perfect to keep kids' feet protected this autumn
    Anderlecht vs Arsenal: Gunners' ray of light Aaron Ramsey shines again

    Arsenal’s ray of light ready to shine again

    Aaron Ramsey’s injury record has prompted a club investigation. For now, the midfielder is just happy to be fit to face Anderlecht in the Champions League
    Comment: David Moyes' show of sensitivity thrown back in his face by former Manchester United manager Sir Alex Ferguson

    Moyes’ show of sensitivity thrown back in his face... by Ferguson

    Manchester United legend tramples on successor who resisted criticising his inheritance
    Two super-sized ships have cruised into British waters, but how big can these behemoths get?

    Super-sized ships: How big can they get?

    Two of the largest vessels in the world cruised into UK waters last week
    British doctors on brink of 'cure' for paralysis with spinal cord treatment

    British doctors on brink of cure for paralysis

    Sufferers can now be offered the possibility of cure thanks to a revolutionary implant of regenerative cells
    Ranked seventh in world’s best tourist cities - not London, or Edinburgh, but Salisbury

    Lonely Planet’s Best in Travel 2015

    UK city beats Vienna, Paris and New York to be ranked seventh in world’s best tourist destinations - but it's not London