20% tax rise looks inevitable

A RISE in VAT could be on the way, whichever party wins the general election.

Chancellor Alistair Darling and his shadow, George Osborne, are said to be looking at the possibility of setting the sales tax at up to 20 per cent.

The tax recently returned to its longstanding rate of 17.5 per cent after Darling temporarily cut it to 15 per cent to help tackle the recession.

The Tories are studying a new VAT increase as the party seeks to bring down the country's massive budget deficit. But, according to reports, Darling, who is working on his last budget before the expected May election, is also considering raising the sales tax.

The increase would raise an extra 13 billion a year. This year's deficit is 178bn.

One source close to the Tory tax team said: "There is a view across the Conservative Party that VAT is going to have to go up."