VAT 20% Anyone...?

What rate will VAT Be raised to..?

  • 17.5%

    Votes: 0 0.0%
  • 18%

    Votes: 0 0.0%
  • 19%

    Votes: 0 0.0%
  • 20%

    Votes: 0 0.0%
  • None of the above?

    Votes: 0 0.0%

  • Total voters
    0
#2
As low as possible so voted 17.5% since IIRC from most things I've read VAT is a fairly regressive tax that disadvantages the poorest sections of society the most.
 
#4
Unfortunately, I think the next budget is going to be painful.
 
#6
Brick said:
As low as possible so voted 17.5% since IIRC from most things I've read VAT is a fairly regressive tax that disadvantages the poorest sections of society the most.
And you think Alistair and Gordy give a shit about them?

20% on luxury items such as flat screen televisions, sky subscriptions, and introduction of VAT for certain periodicals on the top shelf.
 
#7
I have a number of commercial clients who couldn't care less as they reclaim their VAT. However, I also have a number of charitable clients who have to pay VAT and therefore suffer when the rate goes up.

Personally, I can't understand why the brought the tax rate down. It made no difference to Joe Public, and cost businesses tens of thousands. Whatever they decide to go with, they should stick to it.
 
#8
I think that with one eye on next year's General Election they will keep the rate as it is telling us it's a marvellous boost to the economy and a triumph. They will up the underlying duty on booze, fags and fuel. They may even look at an extra hike on certain alcoholic products to discourage binge drinking but those will be brought in after the New Year so as not to ruin anyone's Christmas.
 
#9
DeltaDog said:
Personally, I can't understand why the brought the tax rate down. It made no difference to Joe Public, and cost businesses tens of thousands. Whatever they decide to go with, they should stick to it.
It made no economic difference.

What it did do was show Labour "tackling" the recession.

When your voters are thick as mince, any old dross policies you throw out will help get your core voters out.
 
#10
DeltaDog said:
I have a number of commercial clients who couldn't care less as they reclaim their VAT. However, I also have a number of charitable clients who have to pay VAT and therefore suffer when the rate goes up.

Personally, I can't understand why the brought the tax rate down. It made no difference to Joe Public, and cost businesses tens of thousands. Whatever they decide to go with, they should stick to it.
Alot of places didn't change their shelf prices, what's the betting they find the energy to change them in Jan when it goes back up?
 
#11
MikeMcc said:
DeltaDog said:
I have a number of commercial clients who couldn't care less as they reclaim their VAT. However, I also have a number of charitable clients who have to pay VAT and therefore suffer when the rate goes up.

Personally, I can't understand why the brought the tax rate down. It made no difference to Joe Public, and cost businesses tens of thousands. Whatever they decide to go with, they should stick to it.
Alot of places didn't change their shelf prices, what's the betting they find the energy to change them in Jan when it goes back up?
Probably another good reason for them not to put the rate back up. Not a good idea to start an election year with 2.5% price rises on Jan 1st! Where the underlying duty has gone up the price rise will be even more because it will be 2.5% of the goods plus extra duty so, if 1 ltr of fuel (assuming fuel costs were stable) cost £1.00 before 1st Dec 2009 it will go up to £1.02 on 1st Jan 2010. Beer and fags will do the same.
 
#12
MikeMcc said:
DeltaDog said:
I have a number of commercial clients who couldn't care less as they reclaim their VAT. However, I also have a number of charitable clients who have to pay VAT and therefore suffer when the rate goes up.

Personally, I can't understand why the brought the tax rate down. It made no difference to Joe Public, and cost businesses tens of thousands. Whatever they decide to go with, they should stick to it.
Alot of places didn't change their shelf prices, what's the betting they find the energy to change them in Jan when it goes back up?
What a bone statement.
 
#13
Put VAT up and the public stop buying products. Stopping buying creates lack of demand and thus unemployment. He made his bed but we have to sleep in it. Take it his wife looks after the household accounts!!!
 
#14
wrinkles said:
Put VAT up and the public stop buying products. Stopping buying creates lack of demand and thus unemployment. He made his bed but we have to sleep in it. Take it his wife looks after the household accounts!!!
Thats bollox. Cutting VAT didn't make people spend, putting it back to 17.5% won't stop people spending.

Assuming it goes back to 17.5%, you'd have to buy something big and expensive to notice the difference.... e.g. a 2.5% rise in VAT would add £750 to the price of a £30K car... but if you can afford a £30K car then whats £750??
 
#15
Brick said:
As low as possible so voted 17.5% since IIRC from most things I've read VAT is a fairly regressive tax that disadvantages the poorest sections of society the most.
Exactly, bin VAT totally and raise the difference from income tax.
 
#16
Brick said:
As low as possible so voted 17.5% since IIRC from most things I've read VAT is a fairly regressive tax that disadvantages the poorest sections of society the most.
VAT is levied at 0% on food (but there are lots of exceptions), medicines and children's clothes. It is an important figure because a government could, indeed, tax food!

VAT is levied at 5% on gas, electricity, wood and heating oil.

Everything else is currently rated at 15%.

I have seen the newspapers and internet sites that claim VAT is regressive, but I disagree because the poor spend proportionately more of their income on food and fuel than they do on anything else!

The rich (including those media journalists complaining about it) obviously pay more VAT.

Litotes
 
#17
Strait_Jacket said:
Brick said:
As low as possible so voted 17.5% since IIRC from most things I've read VAT is a fairly regressive tax that disadvantages the poorest sections of society the most.
Exactly, bin VAT totally and raise the difference from income tax.
Everyone pays VAT at some point but not everybody pays income tax. VAT is a very efficient (cheap) tax to collect and is difficult to avoid.

See my earlier point.

Litotes
 
#18
TopBadger said:
wrinkles said:
Put VAT up and the public stop buying products. Stopping buying creates lack of demand and thus unemployment. He made his bed but we have to sleep in it. Take it his wife looks after the household accounts!!!
Thats bollox. Cutting VAT didn't make people spend, putting it back to 17.5% won't stop people spending.

Assuming it goes back to 17.5%, you'd have to buy something big and expensive to notice the difference.... e.g. a 2.5% rise in VAT would add £750 to the price of a £30K car... but if you can afford a £30K car then whats £750??
Cutting prices will increase spending, but not proportional to to cut. People sold the cut at a 2.5% cut, but in reality it was only a 2.5% cut on the tax. This translates to a 1% cut on prices, which most people would look at and decide was negligible.

If they wanted to stimulate the economy via a cut in VAT it would need to cut it by more than 10% (rough guess) to provide a noticable impact.
 
#19
TopBadger said:
wrinkles said:
Put VAT up and the public stop buying products. Stopping buying creates lack of demand and thus unemployment. He made his bed but we have to sleep in it. Take it his wife looks after the household accounts!!!
Thats bollox. Cutting VAT didn't make people spend, putting it back to 17.5% won't stop people spending.

Assuming it goes back to 17.5%, you'd have to buy something big and expensive to notice the difference.... e.g. a 2.5% rise in VAT would add £750 to the price of a £30K car... but if you can afford a £30K car then whats £750??
What you both say has an element of truth. Knocking 2.5% off VAT made very little difference to Joe Public or even to business. Many retailers didn't bother to reduce their prices when vat went down so they'd be wise not to try to push them up by 2.5% in January.
Even though businesses reclaim vat on expenditure they have to pay it to reclaim it so a 2.5% drop in the overall cost of something may have made a difference but I doubt it.
What will make a big difference and what they don't seem to have considered, is the psychological damage that starting a new year with an almost universal price hike may have.
What a pity (for them) that the election will fall before the World Cup, if England had a good run in that then Labour would probably be re-elected on the feel-good factor alone.
 
#20
Magdovus said:
If they wanted to stimulate the economy via a cut in VAT it would need to cut it by more than 10% (rough guess) to provide a noticable impact.
That might be correct - but VAT cannot be cut to below 15% for general goods (by which I mean those where exemptions aren't already in force... i.e. kids clothes, milk, etc). Its part of an agreement between EU member states...

So cutting all VAT to 5% (say) simply isn't an option.
 

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