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News Release

London

Jones Lang LaSalle Comment on Confirmed VAT Rise in January 2011


London, 14th July 2010 - Jones Lang LaSalle’s Head of UK Retail Guy Grainger comments on the implications of the rise in VAT from 17.5% to 20%, effective from January 2011, which was passed in the Commons vote last night with a government majority of 75 votes.
 
“The decision to increase the standard rate of VAT from 17.5% to 20% brings the UK in line with other European markets. But retailers have seen this coming and many will have already factored it into their budgets. Rising operating and supply costs will remain the larger worry and the reality is that these would have had to be absorbed by price rises later in the year in any case.”
 
"Consumer confidence will inevitably dampen in light of the VAT rise and this will of course filter through to retail sales, but again it may not be as bad as it seems as shoppers are already being far more conscientious with their purchases. Consumption patterns are already one of general austerity. It is also encouraging to see that VAT has not been extended to those products currently exempt such as food and the delay in the VAT hike is good news for Christmas 2010 as consumers will bring forward their major purchases."