VAT is expected to return to the usual rate of 17.5% next year, yet new research has found that many consumers are unaware of this.
The results from Auto Trader’s research which surveyed 1,530 UK adults on November 6, highlights a lack of consumer awareness over the impact the rise could have, especially on large purchases.
Of those intending to buy expensive items such as televisions, holidays or cars, the majority (55%) did not plan to bring these forward before VAT increases.
One in 10 people are also unaware the scrappage scheme, which offers £2,000 towards the cost of a new vehicle when trading in a vehicle over 10 years old, comes to an end in February.
With one in 20 people intending to buy a car at some point in the next three months, delaying that decision could mean UK drivers miss two opportunities to save money.
- 30% say they will be forced to take a closer look at spending habits
- 55% believe the increase is an attempt to make money from taxpayers
The research also exposed a lack of trust in the Government’s intentions, finding that 55% of people believe the increase is an attempt to make money from taxpayers. In addition, one in 10 people expect the Government to raise VAT to 20% instead of returning to 17.5%.
Those questioned also felt the increase would backfire in the long term, with a quarter of people believing it will become harder for Britain to come out of the recession.
Matt Thompson, marketing director at Auto Trader, said: "The impending rise in VAT and the end of the car scrappage scheme make a compelling case for bringing your car purchases forward to before Christmas.
"Our research shows the public is still lacking much of the critical information on both proposals and we are highlighting these issues so that consumers can act now."