VAT rate rises to 20%

The 2.5% rise in VAT starts from today. Petrol, electronic goods and cars will cost more as a result of today's VAT hike. VAT has risen from 17.5% to 20% as part of the government's bid to increase its tax revenues and slash UK debt. Chancellor George Osborne said the change, which was introduced at midnight, will be permanent and should raise an extra £13 billion a year for the British economy. The rise means that items that cost £1 yesterday will now cost the consumer an additional 2.13p. The price of a litre of petrol will also rise by an average of 3p.