The VAT increase - how will it affect you?

What is VAT?

VAT - or Value Added Tax - is charged on the difference between the price of a product or service before tax, and its cost of production, and is added to many things we buy and services we use.

This can be anything from toys and televisions to household bills.

It's not added to products like healthy food, water, children's clothes, newspapers or books.

How much debt are we in?

BBC business editor Robert Peston visits high-debt Hull to ask how big are the debts of households and government - central and local? After identifying average household debt at £30,000, he asks how this can be repaid.

Why is the Government doing this?

The UK is currently in debt and the government believe the increase will raise an extra £13 billion a year to cover the gap between the money the UK has available and the amount it spends.

What effect could it have on the economy?

Some people believe the poorest will be hit the hardest by the rise and businesses think it will stop people spending money and then more people will be out of work.

The rise is said to cost an average family an extra £7.50 a week

Is it affecting you?

Are you getting less pocket money or have your parents changed what they buy in the weekly grocery shop? Are you getting fewer treats?

Are you having a 'staycation' this year or perhaps you're having to make do with the clothes and games you've already got instead of buying new things?

Or perhaps you haven't felt any changes yet?