A Visit from the Tax Cut Man – VAT Cut Today

I was excited to hear today that the UK government has cut the VAT – Value Added Tax by 2.5%.

What does this mean for Anglophiles?

A cheaper trip to the UK. To those that don’t know, VAT is basically the sales tax in Britain and the rest of Europe. It’s not exactly a sales tax though, as VAT is built into the prices of goods and services, unlike in the US where sales tax is added to purchases at the point of sale.

What does a VAT cut mean for travelers?

It means a cheaper vacation to London. Currently VAT in the UK is 17.5%, a pretty big chunk of change, especially when you get a $500+ hotel bill. Well, now thanks to the efforts of the UK government to stimulate the economy, the chancellor, Allistair Darling, has cut the VAT from 17.5% to 15%. This means that there is automatically a 2.5% discount on pretty much everything.

With the lowering exchange rates, increased competitiveness on translatlantic airfares and the desperation of business to keep customers during this economic downturn, now is definately the time to book a trip to London and the rest of the UK. With a cut in VAT, expect taxes and fee on transatlantic flights to go down, along with hotel rates. Also, if you like to order products from the UK, expect those prices to go down as well.

I cannot wait for my trip in March, it’s getting cheaper day by day.