Saturday 11th of December 2010
Brits who find they are in a position where they can no longer handle their finances as they were unaware of the impact the rise in VAT will have in the new year may starts asking individual voluntary arrangement (IVA) questions.
From the start of 2011, the rate at which people pay the tax will increase to 20 per cent, up from 17.5 per cent.
However, research from Citizens Advice shows only 13 per cent of people are aware that the rise is about to take place, while just under a fifth don't know what VAT stands for.
"This January could be worse than most for those who are not planning ahead as the 20 per cent VAT increase will put more pressure on budgets," said chief executive of the national charity Gillian Guy.
People who find they have overspent during what can be a costly time of year could find that the increase in tax pushes them deeper into the red, which may lead them to ask IVA questions.
Earlier this week, Ed Bowsher, head of consumer finance at lovemoney.com, noted come individuals are likely to be unaware that they will be charged for dipping into their overdraft and how much these sums can be.
By Hayley Jones
