Emergency cut in VAT

Sunak plans emergency cut in VAT Treasury officials along with HMRC have been told to prepare to cut VAT for a fixed period to help the economy rebound from the coronavirus pandemic. The Chancellor, Rishi Sunak, also discussed slashing business rates in private briefings last week, the Sunday Times reports. The cut to VAT would include zero rating more products as well as a cut to the headline rate. Other proposals being worked up include extending a scheme under which businesses can defer VAT for three months, cutting employer’s national insurance to encourage bosses to hold on to staff and introducing an employer’s national insurance holiday for new staff to encourage recruitment. Former chancellor Sajid Javid says in an interview with the same paper that VAT should be cut from 20% to 17% for a year, arguing that it would “turbocharge growth”.