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Page last updated at 14:31 GMT, Saturday, 2 January 2010

VAT increase to cause confusion

The temporary cut in VAT ends shortly and consumers are facing confusion as retailers dither over when to re-impose the full rate of VAT at 17.5%. The sales tax was slashed to 15% a year ago to boost consumer spending, but returned to 17.5% on New Year's Day.

But while some stores are imposing the increase from January 1st, others have decided to hold on until February or even longer to maintain the post-Christmas shopping boom.

And confusingly, some store chains will operate a two-tier pricing system, with selected goods kept at the current price while others bear the full weight of the rise.

John Whiting, tax policy director of The Chartered Institute of Taxation, joins the programme to explain how the changes in VAT will affect you.

This item was first broadcast on Radio 4's Money Box on Saturday, 2 January 2010.

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