Government's Festive Windfall .....Christmas Taxes

The Christmas festivities are over and we are all trying to forget the Credit Card Bills that will be landing on the door mat in January. These bills can put a cold chill on the Christmas Spirit, especially if you work out how much of your Christmas spending ends up going not to Santa Claus, but to the Government.

Almost every Christmas purchase you make, from ipods to mistletoe, is subject to VAT. If you turn to drink then you are paying excise duty as well, not forgetting the fuel tax levied on journeys to gatherings of your nearest and dearest.

According to calculations by the Taxpayers' Alliance the tax bill this Christmas will cost an average family £225. If that had stayed in your pocket rather than being taken by the government then rather than leaving a mince pie and a glass of sherry for Santa you could have left him over 500 of the finest mince pies and 15 bottles of Harvey’s Bristol Cream, and still have change left over.

This Christmas the festive spending taxes will be worth £5.65 billion to the Treasury. About the only festive spending that escapes tax is the turkey and Brussels sprouts. Of course if European Commission plan to harmonise VAT comes into force then this could spell the end for the current zero rating of essential food. So thanks to Brussels in 2008 even your sprouts and turkey could contribute to your festive tax “gift” to the government.