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Councils not passing on VAT cut?

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An LGCplus investigation suggests that most councils will refuse to pass on the entire 2.5% VAT cut to users of their services.

A straw poll has shown that only 32% of senior officers believed their council would pass on the entire cut to users amid concern about the practical difficulties of changing rates for services such as parking and swimming.

The poll of 34 finance officers and chief executives showed 32% expected to leave their prices unchanged while 35% said they would pass on part of the cut.

The Chartered Institute of Public Finance & Accountancy’s assistant director Alison Scott said: “It would cost a significant amount to reduce the price of services such as parking because notices and stationery would have to be reprinted and machines adjusted.”

But Chester City Council has announced that it is passing on the 2.5% reduction to users of services including car parking, building control and licensing.

Adrian Walmsley (Con), executive member for resources, said: “The reduction in VAT will be a welcome boost for the local economy.”

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