Kingfisher chief executive Ian Cheshire.

B&Q boss wants wider VAT base

Published:  24 May, 2010

LONDON: Ian Cheshire, chief executive of B&Q owner Kingfisher called on the government to broaden the base of products to which VAT is applied rather than raising the headline rate from 17.5% to 20%.

In an interview with the Financial Times, Mr Cheshire said: "A broader base of VAT, rather than very spiky on some and nothing on others would be better."

He hoped to be able to make the case to the government before the budget but recognised that the proposal was likely to prove controversial, both politically and with other retailers.

Mr Cheshire also called for retailers to be given sufficient notice of any VAT increase, as changing prices for the last rise from 15% on January 1 had been an "absolute administrative nightmare".

Food, children's clothes, domestic transport, books, newspapers, magazines, water, sewerage and prescription drugs are all exempt from VAT, while domestic fuel is taxed at 5%. Treasury estimates suggest that about £24bn could be raised by extending the 17.5% VAT rate to zero-rated items and domestic fuel.

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