The decision to raise the standard rate of VAT from 17.5 per cent to 20 per cent next year will be a significant driver behind a stubborn rate of inflation, the Bank of England has said.

Private individuals building their own new dwellings are able to claim VAT on the goods they buy for the purpose.

As many as one in three firms are worried that the planned increase in VAT could have an adverse effect on their business, a new survey has claimed.

The effects of the emergency Budget will be felt adversely by most households and consumers in the UK, a leading economics group has predicted.

Attempts in Parliament to head off the government’s proposed increase in the rate of VAT have been defeated.

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