TUC says VAT hits poorest hardest

THE last VAT increase will cost the lowest-paid workers four times more than any gain from the £10,000 personal allowance, according to the TUC. The research, released today, says by the time of the next election low-paid workers, with an average weekly income of £195.92, will be losing up to four times more per year from the government’s increase in VAT – from 17.5 per cent to 20 per cent in January 2011 – than they will gain from the raising of the personal tax allowance to £10,000. It says the gain would be £1.09 a week, but the loss from the VAT increase is £4.26 a week.