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Homes 'face £300 festive tax bill'

The typical family will hand over nearly £300 to the taxman as a result of their festive spending, a study has suggested.

The average household will face a record Christmas tax bill of £283, as a result of VAT paid on presents and other goods, and tax on alcohol and petrol, according to the TaxPayers' Alliance.

The group said Christmas spending was set to boost the Government's coffers by a total of £7.2 billion, the highest sum ever and 40% more than when it last did the research in 2008.

It added that the festive tax bill was likely to be even bigger next year at £8 billion as a result of the Government's decision to increase VAT from 17.5% to 20%.

The figures are based on accountants Deloitte's estimate that the typical household spends £1,460 on Christmas, of which £365 goes on food and drink, with £803 spent on gifts, and £292 spent on socialising.

VAT will account for the bulk of the tax households pay, at an average of £224, with this charged on most items, other than basic food stuffs.

Households will also collectively hand over £1.35 billion in excise duties on alcohol and £163 million in fuel duty paid on petrol bought to visit relatives.

Mike Denham, research fellow at the TaxPayers' Alliance, said: "While Santa Claus is coming down the chimney, George Osborne is sneaking through the back door, like the Grinch stealing the presents.

"Taxpayers will be disappointed that while they are saving for Christmas the Chancellor is planning to hit them in the New Year with higher VAT.

"Neither of the coalition parties have any mandate for a VAT hike that they expressly said they weren't planning to introduce and that will hit poor families the hardest. The VAT hike should be cancelled."

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