I’ve had a couple of messages from my phone company about VAT.

VAT is a tax that is charged on most things that you buy VAT is a tax that is charged on most things that you buy. Recently it’s been set at 17.5%, which means that shops have to add 17.5% on to their prices and this money goes to the government.

The government has changed the rate of VAT over the past few years: Up to January 2009 the rate was 17.5%. In January 2009 the rate was reduced to 15%. In January 2010 the rate returned to 17.5%. In January 2011 the rate rose again to 20%. I think my phone bill is about £30 +VAT each month. Do these changes really make that much difference to me? How much would you have to spend for a change in VAT from 17.5% to 20% to make a difference to you?

Which of these do you agree with? Up to January 2009 the rate was 17.5%. In January 2009 the rate was reduced to 15%. In January 2010 the rate returned to 17.5%. In January 2011 the rate rose again to 20%. In January 2010, VAT rose from 15% to 17.5%. That’s a 2.5% increase. In January 2011, VAT rose from 17.5% to 20%. That’s another 2.5% increase. In January 2010, VAT rose from 15% to 17.5%. That’s a 16.7% increase. In January 2011, VAT rose from 17.5% to 20%. That’s a 14.3% increase. From 2009 to 2011 VAT has gone from 15% to 20%. That’s a 33.3% increase. Which of these do you agree with?

It’s in the News! VAT changes Teacher Notes

VAT changes Introduction: Content objectives: Process objectives: VAT has been in the news more than you might have liked recently! The increase from 17.5% to 20%, which came into force on 4 January this year, has some predicting drops in spending, with others suggesting little change in spending patterns. This It’s in the News! asks students to look at two aspects of the changes. Firstly, exploring how much they’d have to spend for the change to have an impact on their behaviour, and then looking at whether press reports of a 2.5% change in VAT are accurate. Content objectives: This context provides the opportunity for teachers and students to explore a number of objectives. Some that may be addressed are: interpret percentage as the operator 'so many hundredths of' and express one given number as a percentage of another; calculate percentages and find the outcome of a given percentage increase or decrease recognise when fractions or percentages are needed to compare proportions; solve problems involving percentage changes. Process objectives: These will depend on the amount of freedom you allow your class with the activity. It might be worth considering how you’re going to deliver the activity and highlighting the processes that this will allow on the diagram below:

Activity: Differentiation: Working in groups: Assessment: This activity uses the recent VAT changes as a context for students to explore percentages. There are two activities – firstly, students are introduced to the VAT changes in the context of a mobile phone bill and are asked to consider how much impact the change from 17.5% to 20% will make on this. They are then invited to consider how much they would have to spend for the change to affect their spending behaviour. In the second activity, students are given three statements about the changes and are asked to decide which, if any, of the statements they agree with. Both activities are intended to prompt a discussion about percentages rather than simply providing an opportunity to calculate a number of percentage changes in context. If you have an able group you might also like to explore this infographic illustrating changes in VAT. Differentiation: To make the task easier you could consider: offering a variety phone bills for students to see the impact of the VAT changes asking how much their phone bill would have to increase by to impact on their behaviour and working out what percentage increase this would be only using two of the three statements in the second activity. To make the task more complex you could consider: asking for a short piece of writing explaining the results of the students’ conversations exploring what the percentage increase is on the price of an item. Working in groups: This activity lends itself to paired discussion work and small group work and, by encouraging students to work collaboratively, it is likely that you will allow them access to more of the key processes than if they were to work individually. Assessment: You may wish to consider how you will assess the task and how you will record your assessment. This could include developing the assessment criteria with your class. You might choose to focus on the content objectives or on the process objectives. You might decide that this activity lends itself to comment only marking or to student self-assessment. If you use the APP model of assessment then you might use this activity to help you in building a picture of your students’ understanding. Assessment criteria to focus on might be: calculate percentages and find the outcome of a given percentage increase or decrease (calculating level 6) calculate the result of any proportional change using multiplicative methods (calculating level 7) use fractions or percentages to solve problems involving repeated proportional changes or the original quantity given the result of a proportional change (calculating level 8). Probing questions: These might include: is this the same as prices going up by 2.5%? what percentage will the prices go up by? how many times would VAT have to increase for the price of an item to double? if a supplier sells to a retailer and adds 20% VAT, then the retailer sells on to the public and adds 20% VAT, what percentage of the final price is VAT?

You will need: The PowerPoint presentation. There are four slides: The first two slides set the scene, introducing VAT in the context of a phone bill. The third slide explores the impact of the increase on a phone bill and asks students “How much would you have to spend for a change in VAT from 17.5% to 20% to make a difference to you?” The final slide offers three statements about the changes and asks students which of these statements they agree with.