Shoppers rush to High Street to beat VAT increase

British bargain-hunters rushed the High Street on December 31 to take advantage of lower prices before the return of VAT to its pre-recession level.

Retailer reported by a third on the last year. John Lewis said it saw a year-on-year rise of 31 per cent in the sale of big-ticket items such as televisions and furniture since Monday.

VAT has returned from 15 per cent to 17.5 per cent starting January 1. However, leading retailers such as Tesco and Asda have promised to absorb the increased tax themselves rather than passing it to customers January 31.

Supermarket chain Tesco said that its decision to hold VAT at 15 per cent on a line of its products would save shoppers as much as £12 million.

The Government had slashed the tax last year to support the economy in wake of recession.