Taxation

When you listen to the Chancellor this afternoon announcing a cut in the 17.5% rate of VAT, you might wish to bear in mind that it will have absolutely no effect on:

• the price of a loaf of bread (or any other non-luxury food);
• the cost of heating your house;
• rail and bus fares; or
• the cost of children's clothes

none of which attracts the 17.5% VAT rate.

On the other hand, the price of a Mars Bar may be reduced from 40 pence to 38 pence. Isn't that exciting?