Irish businesses got a shot in the arm today with the news that UK VAT rates are to go up from 17.5% to 20%.The VAT differential will only be 1% compared to just over a year ago when it was 6.5%. "This makes large ticket items such as boats and equipment much more affordable at home and Irish business more competitive. It will help a lot with the problem of people crossing the border to shop" said Irish Marine Federation (IMF) chairman David O'Brien.
The Irish Marine Federation, an IBEC affiliated trade association, expressed concern at the implications for the marine industry when the UK Government reduced 2.5% to 15% with effect from 1 December 2008. It said then the effect would decimate the Irish Marine Industry, a forecast that proved correct.
British Chancellor of the Exchequer George Osborne increased the value-added tax rate to 20 percent from 17.5 percent in the first permanent change to the levy on sales of goods and services in almost two decades.
"The years of debt and spending make this unavoidable," Osborne told Parliament in London in his emergency budget today as he announced a package of spending cuts and tax increases to cut the U.K.'s record deficit.
The Federation, that represents, the marine leisure industry has also renewed its call for VAT on safety equipment such as lifejacket and radios to to be abolished.