January’s VAT rise from 17.5 to 20 per cent was one of the hotly debated points of contention in this afternoon’s Budget debate.

Whilst the Treasury has confidently predicted that the new rate of VAT will swell its coffers by some £13.5 billion, the ‘average’ reduction in household budgets has been harder to gauge.

Labour Leader Ed Miliband accused the Chancellor of “Del Boy economics” in promising tax ‘giveaways’ on fuel duty whilst simultaneously taking away a greater sum through VAT.

This echoed Shadow Chancellor Ed Balls’ claim in this morning’s Mirror that “[George Osborne will] say he’s raising what you can earn before paying tax. But is it worth more than the £450 he’s taking off families in VAT?”

So is £450 a fair estimate of the amount families can expect to see taken off their household budgets?

The Treasury estimated at the time of the last Budget back in June that the mean reduction in ‘indirect taxes’ (of which VAT is by far the largest component) across all income deciles at approximately £350.

Whilst some outlets did report that £450 was the “average” addition to household bills that families could expect over the year, using the forecasts the Office for Budget Responsibility provides, only those in the two highest income deciles would see such a rise.

However there have been other estimates that have put the increase at nearer to the £450 Ed Balls claims. In December, HSBC’s chief economist Dennis Turner estimated in a report by data management firm Acxiom that the VAT rise would hit some households with a £450 extra burden. However whilst some papers reported that this would be the amount that “middle-class” families would lose out by, in fact it applied only to the most well-off category modelled, with the average household losing £225 per year.

Back in June accountants Grant Thornton reported that the average household would pay £517 extra in VAT as a result of the rate change. This was calculated by taking the amount the Treasury eventually expects to receive through the measure - £13.5 billion – and dividing it equally between Britain’s 26 million households.

However the £13.5 billion refers to revenues the Chancellor expects to receive by 2014-15, and therefore the £517 household rise does too. Taking the amount expected to be taken in 2011-12 (£12.1 billion) produces a lower household estimate of £465 in extra VAT bills for the coming financial year.

Whilst this is still above the Shadow Chancellor’s figure, there is some reason to be cautious. This measure calculates a mean figure rather than a median one, and therefore does not account for the skewed income distribution and spending power evident in the various income brackets.

Furthermore, by taking the tax receipts figure and sharing it equally amongst households, the estimate won’t account for other bodies that pay VAT, such as charities and other organisations. Households only account for around two thirds of VAT receipts, and reducing Grant Thornton’s estimate for 2011/12 by a similar amount gives a figure of £307.

This was also the approach of a study by the Centre for Economic and Business Research (CEBR) for Kelkoo, which put the average rise in household shopping bills at £425. Reporting before the June 2010 Budget, it estimated that £11.4 billion would be raised for the Treasury, the equivalent of £425 per household. Again, once this is reduced by a third we get a figure of £281.

Given these problems, a more accurate estimate may be that proffered by Deloitte, who provide a ‘bottom-up’ analysis using Office for National Statistics data on family spending. Broken down by income deciles, the median increase in family expenditure as a consequence of the VAT rise was £206 per year. At the top end of the spectrum, Deloitte estimated that the top income decile may be £520 worse off a year.

So whilst it is not impossible to reach a figure in the £450 ballpark suggested by Ed Balls, in context there is good reason to believe an true ‘average’ increase for households may be quite a bit lower. The accuracy of Mr Balls’ statement may therefore depend upon exactly which “families” he had in mind. Furthermore the extent to which the VAT rise overshadows the savings that families can expect as a result of the Budget depends upon another contentious figure on just how large these savings are, a matter Full Fact is currently investigating.