Budget delivers VAT and gaming tax relief blows

Extra VAT will mean laptops and TVs go up in price
Extra VAT will mean laptops and TVs go up in price

A big rise in VAT has been announced in the latest budget and the gaming industry's tax relief has been withdrawn.

Chancellor of the Exchequer George Osborne announced that VAT will rise from 17.5 per cent to 20 per cent next year in his first budget for the Conservative/Liberal coalition government.

Because consumer electronics tend to be among the higher value objects that people buy, VAT increases tend to hit sales harder.

With VAT calculated from the value of the product, the price of things like televisions is likely to increase significantly.

The increase will kick in from January 4 2011, which at least gives you a little time to rush out and buy Microsoft's Kinect for Xbox 360, your Nintendo 3DS or PlayStation Move.

Games tax

The Chancellor also abolished tax relief for games companies - announced under the past government.

Osborne stated that the tax relief offered by his predecessor Alastair Darling was 'poorly targeted'.

This will hit the already ailing UK games industry hard.

Broadband budget

Osborne also announced that the new government will not be adopting Labour's 50p broadband tax, saying that he was dissatisfied with the idea.

Instead, Osborne is hoping that competition in the sector will mean that superfast broadband comes to the UK more rapidly.

It was also announced that the Conservative/Liberal coalition government will fit the bill with money from the TV licence fee for those living in the more isolated areas of the UK.

The licence fee idea was something which was leaked back in May.

Patrick Goss

Patrick Goss is the ex-Editor in Chief of TechRadar. Patrick was a passionate and experienced journalist, and he has been lucky enough to work on some of the finest online properties on the planet, building audiences everywhere and establishing himself at the forefront of digital content.  After a long stint as the boss at TechRadar, Patrick has now moved on to a role with Apple, where he is the Managing Editor for the App Store in the UK.