There has been a great deal of chit chat about the potentiality of a rise in VAT, the Value Added Tax imposed on the British people because the EEC (the forerunner of the EU) demanded it. Here's a PDF all about introduction of the VAT, click here to download it.
Most people live in ignorance of this tax, because it is collected without you seeing it, by the seller of the goods.We are financially raped with every transaction made.
In principle, VAT applies to all provisions of goods and services. VAT is assessed and collected on the value of goods or services that have been provided every time there is a transaction (sale/purchase). The seller charges VAT to the buyer, and the seller pays this VAT to the government. If, however, the purchaser is not an end user, but the goods or services purchased are costs to its business, the tax it has paid for such purchases can be deducted from the tax it charges to its customers. The government only receives the difference; in other words, it is paid tax on the gross margin of each transaction, by each participant in the sales chain.
VAT impoverishes the poor, as it is levied on virtually EVERYTHING people do: