The Government confirmed it will be putting VAT back up to 17.5% in January.

It was reduced to 15% when Britain went into recession.

That means VAT registered online businesses will have to raise their prices.

Internet auction site eBay is one site that has issued advice on how to recalculate prices for listings.

There were rumours the increase would be higher than 2.5%.

Chancellor Alistair Darling said in his pre-budget report he has no plans to impose any further increase.