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PRE-BUDGET: Darling announces VAT rise and extension to "Time to Pay"

Chancellor Alistair Darling has announced a rise in the rate of VAT among a raft of measures announced in today’s pre-Budget Report.

VAT will go back to 17.5 per cent on 1 January 2010. Mr Darling also said he would extend “time to pay” arrangements that have given tens of thousands of construction companies some leeway on their tax obligations.

Other measures included a boiler scrappage scheme, references to extending the electrification of the rail network, and also a refocusing of regeneration spending.

The chancellor also set a long term “deficit reduction programme” and outlined a tax on bankers’ bonuses.