Darling's VAT cut a last-minute decision
Darling's VAT cut was a last-minute decision after the government had considered raising VAT to 18.5%
The government considered lifting VAT to an unprecedented 18.5%, an
inadvertent publication of an early version of the
report documents has revealed.
Chancellor Alistair Darling decided only at the last minute to scrap plans
for the VAT hike in 2011-12, the Financial Times reports.
HM Treasury insisted last night the VAT rise, which would have generated £5bn
a year, was dropped by Darling in favour of a five basis point rise in national
insurance contributions and a new 45% income tax rate on high incomes.
A Treasury official said the two measures together would raise about £5bn a
year and there was no hole in the government’s forecasts for future revenue.