VAT hits 18.5%, or does it?
The rate of VAT is to go up to 18.5% in 2011-12, according to the Treasury.
That's on top of the return to 17.5% already announced, and means roughly £5bn extra on Britain's shopping bill, as part of the payback budget that will wallop us once the anti-recession splurge is over.
The news is contained in Treasury documents which were intended to provide an explanation of the pre-Budget report published yesterday by Chancellor Alistair Darling.
"The proposed changes will reduce this (VAT) to 15% from 1 December 2008 until the end of 2009," it says, just as the Chancellor announced.
But then: "The standard rate will then return to 17.5% from 1 January 2010 and subsequently increase to 18.5% in 2011-12."
The catch is ... it's wrong.
HM Treasury didn't mean what it published. We're now told that mandarins had been considering what might happen if VAT went up to 18.5% and forgot to delete it before heading for the printers.
The document goes on to give the Treasury's estimate of how much it will cost business to implement the cut that definitely is going ahead, followed by the return to 17.5% at the end of next year.
It goes like this: the time businesses will take to familiarise themselves, of between 30 minutes and three hours, will cost them more than £24m this year and another £16m next year.
The cost of implementing the cuts and subsequent rise is a bit more costly for those who sell to the public with VAT included in their prices, as it includes changes to barcode and relabeling.
Restaurants might have to reprint menus, for instance.
That should cost up to £600 for big businesses, with a total for British business of around £50m this year and £45m next year.
Extra accountancy costs could top £50m over the two changes.
The biggest part of the bill is in accounting software changes.
With a simple accounting system, that could cost you a tenner, but the more complex variety may require £500 of patches and fiddling with the IT, with a bill to business of £70m this year and £45m next year.
With a modest bit of rounding up and down, the total cost hits £300m.
If the Treasury changes its mind on that 18.5% idea - deciding it may have been necessary after all - at least businesses will be better prepared, and the changes should be cheaper next time.