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The 2.5 percentage point increase in VAT that was announced by the Chancellor of the Exchequer last week is estimated to cost the average Scottish household approximately £380 per year. The lowest-income households are estimated to be disproportionately affected by this regressive tax increase.
The VAT increase will also increase costs facing Scotland's public sector. Initial estimates place the full-year costs at £7.2 million for the core Scottish Government, £26 million for the national health service in Scotland, £3.8 million for the Scottish Prison Service, and £700,000 for Historic Scotland.