On January 1st 2010 the VAT rate will return to 17.5%, meaning a £10,000 new car purchased through the Car Scrappage Scheme will cost an extra £250. The tax was cut from 17.5 per cent to 15 per cent in November 2008.

High profile retail establishments including Selfridges, John Lewis and Bluewater Shopping complex in Kent have reported strong Boxing Day sales figures in big ticket items such as flat screens and fridges as the savvy British consumer prizes last minute deals and saves the VAT difference.

Car Showrooms may also continue this post Christmas rush as new car models are at the higher end of the consumer market. Potential car buyers will be reminded that there are now less than 4 days left to take advantage of both the Car Scrappage Scheme discount together with lower 15% VAT rate.

The Car Scrappage Scheme is set to end on the 28th February 2010, so car buyers now have only 3 days to save the 2.5% in VAT and just 2 months to take advantage of the £2,000 discount.

Homeowners are also starting to take advantage of the new Boiler Scrappage Scheme, where a warm £400 incentive is being offered for replacing old and existing G-rated boilers for a new energy efficient boiler model.