Shropshire shoppers face confusion over January’s VAT increase as retailers adopt different approaches to the tax rise, it emerged today.

A number of high street chains are delaying increasing their prices in line with the VAT change from 15 per cent back to 17.5 per cent, while others are only imposing the rise on certain products. VAT was cut to 15 per cent in December last year in a bid to boost consumer spending.

The move cost the Government an estimated £11 billion in revenue.

Keith Winter, of Shrewsbury accountancy firm Dyke Yaxley, said that there had been a possibility that VAT could actually be increased from 17.5 per cent in the Government’s pre-budget report.

“It was good news that VAT didn’t go up, although it would have been a surprise if it did. I thought it could even have stayed at 15 per cent for longer,” he added.

And it appears many of the major chains agree with Argos delaying any price increases until the end of January, when its new catalogue is published, in order to reduce the costs associated with the change.

Supermarket giant Asda has said it will not increase prices on more than half of the products upon which VAT is paid, including the whole of its George range.

Tesco has also said it will freeze VAT at 15 per cent on thousands of products, ranging from televisions to washing powder, in a move that it claims will save customers £12 million.

Rival supermarket chain Sainsbury’s has said it will not be increasing prices on its own-brand Tu clothing, as well as homeware and electrical items, CDs, DVDs and games, although the price of other goods on which VAT is charged that are not on promotion will rise.

Sir Philip Green has said that he will absorb the cost of the VAT increase at all of his Arcadia Group stores, which include Top Shop, Dorothy Perkins and Miss Selfridge, as well as Bhs.

But Homebase, which along with Argos is part of the Home Retail Group, will be raising VAT on its goods from the beginning of January, although it stressed that as VAT forms only one element of pricing, it did not expect prices to increase immediately.

And Marks & Spencer says that is planning to raise prices in line with the VAT increase on all general merchandise from January 1 and on food items on which the tax is paid from January 11.

By Business Editor Amy Bould