CHARTERED accountants Deloitte & Touche are predicting that the general rate of VAT will increase in the forthcoming Budget - possibly up to 20pc.
VAT partner Kevin Ahern said: "An increase in the standard rate of VAT to 20pc in the forthcoming Budget is a very real possibility.
"None of the Government's pre-election taxation pledges ruled out increasing the rate of VAT."
During the build-up to the election, Labour promised reduction in the VAT rate charged on domestic fuel and power from 8pc to 5pc.
Labour ruled out extending VAT to zero-rated goods such as books, magazines or children's clothes.
But Deloitte & Touche say Labour did not rule out an increase in the standard rate, currently 17.5pc.
It would raise as much as £5 billion in additional revenue.
"At 17.5pc, our standard rate is one of the lowest in Europe," Mr Ahern said.
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