- The government cut VAT to 15% in December 2008 to boost the economy
- Darling has insisted it will return to 17.5% on 1 January 2010
- But retailers and business groups are pressuring him to delay the increase
- Experts say Darling is likely to postpone the increase until 1 February
The government is likely to delay returning VAT to 17.5% to boost post-Christmas retail sales, experts have predicted.
In its predictions for the chancellor's forthcoming pre-budget report, accountants MacIntyre Hudson forecast that Alistair Darling will defer the planned VAT increase to 1 February instead of 1 January when it is due to come into force.
Last week, Darling insisted that VAT would return to 17.5% from 15% on the first day of 2010 but retailers and business groups have demanded a delay claiming that changing the rate at midnight on 1 January would cause problems for businesses during the busy January sales period.
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