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Treasury written question – answered on 18th January 2011.

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Photo of Jim Sheridan Jim Sheridan Labour, Paisley and Renfrewshire North

To ask the Chancellor of the Exchequer what recent assessment he has made of the effect on net incomes of value added tax.

Photo of David Gauke David Gauke The Exchequer Secretary

Value added tax is an indirect tax. Although prices on certain goods and services will increase as a result of the rate increase, incomes will be unaffected.

Annex A of the Budget 2010 publication shows that in both cash terms and as a proportion of their income, higher spending households will pay more of the tax increase than lower spending households.

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