Big-ticket items see cut in VAT

VAT is coming down but just for 13 months

People shopping for higher-value items in big stores are more likely to get the benefit of the new lower VAT rates, research by the BBC has shown.

Spot checks on four kinds of shop in eight UK areas revealed that not all retailers had passed on the reduction in VAT from 17.5% to 15%.

Prices of fridges, TV sets and other electrical items had generally been discounted in line with the tax cut.

But smaller shops selling cheaper goods had often failed to cut prices.

One newsagent in Swindon told BBC researchers that it was "too much hassle" to change prices in his shop.

According to checks carried out in locations including London, Stoke and Glasgow, department stores, supermarkets and consumer electrical stores were generally passing on the reduction in VAT.

Labels unchanged

Some retailers said price labels on goods had not been changed, but VAT changes would be reflected in what was actually charged at the tills.

Others had already marked goods with the new prices. The Euronics electrical store in Coventry had been selling Hotpoint fridge/freezers at £399.99 on Friday, but had changed the price to £390 by Monday morning.

Other stores passing on the reduction included Tesco, Asda, Marks and Spencer, Comet, House of Fraser and Boots.

Debenhams said it was deferring the cut for a week until 8 December, even though the government's pre-Budget report said it would take effect from the start of this month.

However, smaller independent stores, such as corner shops, were often refusing to bring their prices down in line with the lower rate of VAT.

Newsagents and other small shops in locations including Swindon, Coventry and Somerset had left their prices unchanged.

The cut in VAT is intended to be temporary and will last until 31 December 2009.