Many large retailers pledge to absorb or delay VAT increase

Big stores pledged to absorb or delay yesterday's VAT rise as retail groups predicted this month's spending will be "a little lighter" than usual.

Consumers – particularly those looking to buy expensive items like furniture or cars – rushed to the shops before VAT returned to 17.5 per cent.

But many of the bigger retailers promised to freeze VAT at the lower rate of 15 per cent on thousands of products while others will introduce the increase gradually.

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Argos plans to delay any price increases until the end of January. But its fellow Home Retail Group firm Homebase has said it will raise VAT on all its goods, although it said that because the tax was only one element of pricing, the increase was not likely to be immediately evident.

Tesco pledged to freeze VAT on many non-food items.

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