Who paid for the increase in the 9% VAT rate? You did

Smart Money: The rise fed through to prices immediately – and so would Brexit tariffs

Peter Mark hair salon on Grafton Street celebrates the reduction of the VAT rate on hairdressing to 9% in 2011.

Peter Mark hair salon on Grafton Street celebrates the reduction of the VAT rate on hairdressing to 9% in 2011.

Noticed the price of your cup of coffee going up ? Or your visit to the hairdressers? One of the most controversial moves in the last Budget was the increase in the 9 per cent VAT rate, amid warnings that it would hit the hotel and restaurant sector and tourism.

It is too early to judge whether it will – but what is clear is that the bulk of the rise is being paid by consumers. The evidence, in recent inflation figures from the CSO, shows an extraordinarily quick pass-through in the VAT increase to consumers immediately it took place in January.

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