Most of us know about VAT to at least some degree. You probably know for example that you pay VAT on a wide variety of goods at the rate of 20%. You might also know that some goods are zero rated for VAT.
One of the better known areas of goods for being zero rated is food – something you would expect any political party to know something about. However judging by the latest advert released by Labour, it would appear this isn’t something we can rely on.
The ad – featuring the strapline ‘hardworking Britain better off’ – features the faces of Nick Clegg and David Cameron as two peas alongside four others in a pod. It also features a variety of goods that would appear in most shopping baskets from time to time. These include fruit and vegetables, cola drink, chocolate chip biscuits and cleaning products.
You might wonder where the issue is. Well, the issue is that according to Labour, the current government has added a total of £450 in VAT payments onto the average shopping bill. However as we know, food is zero rated, and most of the items featured in the ad wouldn’t incur VAT at the tills. Not all, but most. So this would seem to be an ill researched ad. What’s more, there is no suggestion of where these figures came from, or the reasoning behind the £450 increase. Nor does there appear to be any forthcoming from Labour to back up their statement.
Needless to say the coalition has made the most of pointing out the errors. Labour was the party in power when Britain got heavily into debt in the first place, and many people are keen to point out the Labour party has no strong ideas to return to power with, if they were voted in at the next election. This ad in particular seems to indicate they still display so called “economic incompetence”, as Tory MP Henry Smith has stated.
It has also been stated that Labour plans to increase the rate of VAT paid if it should get back into power. This too seems to illustrate how petty the situation is, using VAT as a weapon when it could so easily be turned on them as well. We shall see how this situation develops but it would appear a lot of regular people are more educated on the topic of value added tax than those in the opposition party seem to be. It remains to be seen which party does best in the elections that are coming up, but if this VAT swipe is anything to go by, we already know which party will be let down by their lack of knowledge.