Start of the 13 month 15% VAT Rate Today

But will it actually have the desired effect and who will profit?

Large e-companies (such as Amazon) clearly will have no problems implementing and passing on the lower rate to their customers. However, the "very type of smaller business" most affected by the credit crunch will have a much harder time to implement and pass on the savings in the high street.

The cost to small businesses to implement the VAT rate change will be high compared to turnover and it will be unlikely that the customer will see benefit at the till. A product or service that has been pitched at £9.99 will not be marked down to £9.77 for long.

The VAT rate change is a negative way of dealing with credit crunch; it serves to illustrate the despair that the New Labour Government is in.

It is back to the OLD Labour days of the past. History does indeed repeat itself

High tech products set to increase by 20% on high street

It has been announced by leading Japanese companies yesterday that due to the weakening of the Pound that many imported high tech products will now face a "price increase" of up to 20%.

Could the government have known in advance when reducing the VAT rate to 15%!

Announced in BJP 5/1/09 latest news section quote:

"Nikon, Canon, Sony and Leica are all expected to raise their prices in January as the pound continues to fall in value. Nikon has confirmed to BJP that it is to implement a price increase across its range of imaging and optics products, effective on 12 January. 'The price increase is the result of volatile exchange rate conditions and will continue to be reviewed on a regular basis,' a spokeswoman says. 'All product groups will be affected by the price increase to some degree. A recommended retail price list will be available to view from 12 January online.'

Leica has also told BJP that, as of 01 January 2009, its prices would increase across the board.

Canon and Sony are also said to be looking to raise their prices in the UK and continental Europe as both the Euro and the pound have seen their values decline against the Yen. Canon is expected to increase its prices in its consumer division, which sells digital cameras and printers.

The increases could reach up to 20% for all companies, BJP understands."

See Reuters UK feed for latest