When VAT was first introduced it replaced Purchase Tax which was 25% on some goods. Including as I remember, cars: the the loss of tax revenue was too much for the goverment to adopt a single rate, so the higher rate and a special tax on cars was the result.
It's not. I first mentioned 25% but now Bob has mentioned 12.5% for the higher rate that seems more memorable. And, this is what is in the spreadsheet.
One aspect of the higher VAT rate that hasn't been mentioned is the confusion it caused that took HM Customs & Exise (as it then was) about 2 years to resolve.
I can't remember which Clowncellor of the Exchequer was initially responsible but the legal wording used the maximum amount of crass incompetence.
The higher rate was levied on 'luxury' items which included TVs, radios, etc., - completely overlooking the fact that all of the component parts of such items could equally well be found in non-luxury and industrial devices.
I discovered this very early on when I needed a low field isolating transformer to fit in a confined space inside a TV cabinet. Ah, said the supplier, if it's for a TV it's 25% VAT! No, said I, it is being used for industrial purposes! The invoice showed VAT at 8% ...
Obviously it made little difference to buyers who were VAT registered and could claim the VAT back - though it probably caused their finance departments and accountants some head aches - but it was extremely important to anybody who was not VAT registered and for the vast number of electronic enthusiasts who fell into the same category.
Of course, like the Clowncellor of the Exchequer, HMC&E didn't have a clue! Thus they found themselves have facing a problem about which they had no experience or knowledge whatsoever! No wonder it took them so long to come up with a solution!
I was doing audio equipment design in Johanneseburg at one point when I got a call from a very very dull customs official..this was at sanctions time, when locally made stuff got a huge advantage by having luxury goods have a huge whacked on import duty. But not spare parts for industrial stuff.
The box was capacitors. Thousands of them.
"Ach now what would the kerpaciters be then, I have kerrpaciters, Industrial, at 10%, Kerrpacitors for domestic goods at 15%, or kerrpacitors for RRRRadio Spare Parts at 5%"
"Obviously they would be radio spare parts" I replied
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