Research released today has highlighted how little the general public knows about VAT (Value Added Tax).
Despite the recent increase in VAT from 17.5 to 20%, a significant percentage of the general public does not know which products are subject to the tax. Of a nationally representative sample of 3,000 people polled, one in five people (19%) believes there’s no VAT on alcoholic drinks, and almost as many believe that adult clothing is also VAT-free.
Just under half of those surveyed did not know that toilet paper was subject to VAT and 56% did not know that sanitary products were also subject to VAT (albeit at a reduced rate). Almost a quarter (24%) falsely thinks the tax applies to everyday staples like bread and milk which are actually VAT exempt.
Over a third (37%) believes zero-rated newspapers and magazines are subject to VAT. And despite the recent increase to 20% that caused so much public outcry, six out of ten shoppers (61%) also admitted they don’t think about VAT at all when buying goods and services.
The survey was carried out by Live & Breathe, a creative agency which focuses on shopper marketing. Live & Breathe spoke to 3,000 adults around the UK to get an in-depth picture of the country’s shopping habits and behaviours.
The table below shows ten types of products, three of which (marked with an asterisk) are exempt or zero-rated and seven which are actually subject to VAT (albeit sanitary products are subject to a reduced rate). For each item, the percentage figure is how many UK adults believed that VAT applied to it.
Nick Gray, Live & Breathe MD, comments: “Considering the outcry when VAT went up to 20 percent at the beginning of the year, it’s amazing how little British shoppers understand about what is and what isn’t subject to the tax. “HMRC could probably do a better job communicating it to the public, so that the man and woman on the street know what products are affected when VAT goes up or down.”
Check out 12ahead, our brand new platform
covering the latest in cutting-edge digital marketing and creative technology from around the globe.
12ahead identifies emerging trends and helps
you to understand how they can apply to modern-day companies.
We believe 12ahead can put you and your
business 12 months ahead of the competition. Sign up for a free trial today.