VAT goes back up to 17.5% on 1st January 2010 – the start of the new sobriety, the lean mean teens!

Is it all bad news, though? Are there ways of softening the blow?

Well, there are a few. Here are my ideas:

• Buy now. You’ve got until midnight 31st December to buy big-ticket items before they rise in price so if you buy them now you can save 2.5%. It doesn’t make so much different with small things but with furniture, cars or other large-cost items it’s worth making your mind up now!
• Buy secondhand. If you buy things secondhand, particularly from individual sellers, then you avoid any VAT payments. Buying on eBay (check out how to sell things as well as buy in this article), Gumtree, eBid or any of the other sales sites around means you can cut out VAT if you are buying from an individual. This should make secondhand fashion sites we mention in this fashion article even more popular! It’s also particularly true when buying a car. Remember, when you buy a car new from a showroom you lose money as you drive it off the forecourt, partly because of the VAT you have to pay. Buying from an individual through the small ads, though, means you save on any VAT payments.
• Pick shops that are delaying the VAT rise. A few have said they won’t put their prices up until later (probably February/March) so keep your eyes peeled for those places. There’s still a bit of time for some shop goods.
• Buy books, children’s clothes and food from supermarkets and markets (i.e. not restaurants and cafes) – currently these are not subject to VAT (but give it time – the government needs to claw back cash so who knows what they will be taxing soon)
• Get clever with your spending. We’ve got loads of ideas through the site, and in particularly in our article on how to live on half your salary that will help with this. The prices will be going up in cafes pretty quickly so it’s even more important to take a flask to work rather than buying a coffee and making your own sandwiches or salad in a box rather than popping out to the sandwich shop at lunchtime. Get into swapping clothes with friends, have more home-cooked meals rather than takeaways. Don’t narrow your life, though, you can still have fun for half-price. For example, I’m sure the 50% off deals on Toptable and other sites will continue through 2010. In fact, there may be even better ones as restaurants struggle to get the punters in. Keep watching this site for foodie updates!
• Walk or use public transport. Petrol is going to go up and I think it will continue to rise in 2010 as oil prices are likely to rise too. Start thinking now about walking, cycling and training it more. I realise how many local trips I make with my car and those are going to have to be cut down. It’s better for my fitness levels anyway…I wonder where I put my bike.

All in all it’s that old principle of thinking about what we buy and making sure we spend on what is necessary and what we love then save on things that don’t matter so much. At least it might mean we waste less which can’t be a bad thing!