Photo stunts & financial costings show impact of VAT on poorest families

We did a photo stunt this week outside the Houses of Parliament with a large and small weight to illustrate the heavy impact a possible VAT rise will have on low income families in the UK. People on a low income are disproportionately affected by the impact of VAT, with poor families currently spending more of their disposable income on VAT than richer families; the poorest 10% of families spend 14% of their income versus 5% for the richest.

VAT is set at a flat rate and does not take into account the ability of people to pay.

VAT rise burden
VAT rise burden

When we ran the crisis grants programme with Family Action to help families struggling to buy essential items, the most requested items after children’s clothes and school uniforms were children’s beds, washing machines and furniture.

Children’s clothes are exempt from VAT, but other goods which are indispensable for families carry the same rate of VAT, no matter how poor or rich you are. Raising VAT to 20% could mean that the poorest families already struggling to afford basic household items pay more than £1,600 a year in VAT.

We don’t believe the poorest children in the UK should pay for the economic crisis. Instead of a VAT increase the next government should look at other measures to bring down the deficit.

The government could:

• Introduce a Financial Transactions Tax

• Abolish tax havens and take action on tax avoidance

• Increase income tax for the very highest earners

• Extend inheritance tax.

So, how can you help? Tell your local candidate you want them to support children in poverty in the UK.

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