Purchase Tax

Purchase Tax was a tax on 'luxury' goods sold in the UK from 1940[1] until 1973.[1]

On 21 October 1940, during World War II, Purchase Tax was introduced at a rate of 33 1⁄3% as a tax on sales of "luxury" goods in order to reduce the deemed wastage of raw materials.

At various times the tax was set at different rates depending the government-determined degree of "luxury"[2] of the item.[3]

In preparation for joining the European Economic Community (EU)[4] on 2 April 1973 Purchase Tax was abolished and replaced by Value Added Tax (VAT) at a rate of 10%, shortly to be lowered to 8%.[3]

References

  1. 1 2 "Taxation – Key dates". Parliament.UK. Retrieved 24 December 2014.
  2. ↑ "Purchase Tax". Peterice. Retrieved 24 December 2014.
  3. 1 2 "VAT: a brief history of tax". The Guardian. Retrieved 24 December 2014.
  4. ↑ "Post-war taxation". Parliament.UK. Retrieved 25 December 2014.

External links

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