measure for calculating the impact of VAT than income? Well, this report states that many people in the bottom decile of income are only there temporarily - e.g. students or those between jobs. Their spending (and thus VAT expenditure) may be relatively high compared to their income, since they do not need to reduce it during their short spell of poverty. While this is clearly true of some people in the bottom decile, it seems unlikely to be true of all of them - the IFS does not provide any analysis, so it's hard to evaluate. Meanwhile, ONS analysis suggests VAT is regressive even as a percentage of expenditure, as the IFS acknowledges here: http://www.ifs.org.uk/publications/4813 ] So, calculating by income deciles, the true impact of the VAT rise is always closer to the blue graph than the red graph. A truly bleak picture. This is clearly a complex topic, so have I missed something? One more thing -- the IFS report warns that the Family Expenditure Survey 'significantly under-records expenditure on VATable goods' (p. 197), by a factor of around 1.4. Do you use a similar multiplying factor for the UK Expenditure and Food Survey in your blue graph? Anna -- many thanks for your comments. In terms of the IFS analysis, I think the point they are trying to make is that the UK Expenditure and Food Survey (which is what they use to calculate the distributional impact of VAT changes) doesn't measure household income very well as it's