The economic consequences of Brexit
Poll: The economic consequences of Brexit
Total Members Polled: 732
Discussion
jsf said:
jamoor said:
Am I understanding that the taxpayers will subsidise nissans operations here? Or am I mistaken?
What May has said to the whole car industry, is she will ensure that the UK will remain a good place to base your manufacturing.That is multi-faceted and can include tax breaks, commitment to infrastructure investment, training grants, reduction in Corporation tax, no planned changes to employment laws and so on.
Both Nissan and the Government have stated that Nissan has not received a special deal, they just feel assured that no matter what happens, the UK will remain a good place to do business.
In the highly unlikely case that is not the case, the government could happily subsidise the tariffs on exports with the receipts (by far greater) that it would receive from German car manufacturers importing into the U.K.
This is the first example of why there will be a substantive deal on tariffs with the EU because it is to their massive advantage, given our trade deficit with them.
I bet Jean-Claude Juncker reached for his sixth whisky of the day when he heard the news this morning.
jamoor said:
Garvin said:
You've lost me on this one? The only 'tax' the UK govt would be paying (if it's even true) is the tariff on Nissan exports to the EU. The argument is that they would pay this from the income generated by the tariff imposed on imported cars from the EU. These tariffs are paid by EU industry and are nothing to do with taxes levied within UK or any massive rise in them!
Am I understanding that the taxpayers will subsidise nissans operations here? Or am I mistaken?The way it works is that the cars will arrive at (say) Southampton and will go into bonded storage. The car will be released when the duty and VAT are paid. The VAT is based on cost of car+cost of shipping+cost of duty.
This money goes to HMRC.
The end customer then pays all of the above, plus the dealer's profit and transport costs.
In practice, this would result in a 12% increase for the customer. 10% would be the duty under WTO rules. There would be an additional 2% because VAT is charged on the duty.
I hope this makes sense.
So, there is no direct subsidy to Nissan in any of the above. However, Nissan cars will enjoy a 12% price advantage over EU cars. This isn't exactly a subsidy, but it does help Nissan sell more cars here.
Edited by don4l on Thursday 27th October 19:09
RYH64E said:
jsf said:
Should the EU choose to not do a trade deal on car imports, that would trigger a huge increase in tax take, which would allow them to lower VAT, corporation or income tax to help counter the increased cost of living from import duties.
And who would be paying the huge increase in taxes?If the government use the import duties to lower the VAT rate on cars and they lower corporation tax on the business, no one will, it will be cost neutral.
jsf said:
RYH64E said:
jsf said:
Should the EU choose to not do a trade deal on car imports, that would trigger a huge increase in tax take, which would allow them to lower VAT, corporation or income tax to help counter the increased cost of living from import duties.
And who would be paying the huge increase in taxes?If the government use the import duties to lower the VAT rate on cars and they lower corporation tax on the business, no one will, it will be cost neutral.
RYH64E said:
jsf said:
RYH64E said:
jsf said:
Should the EU choose to not do a trade deal on car imports, that would trigger a huge increase in tax take, which would allow them to lower VAT, corporation or income tax to help counter the increased cost of living from import duties.
And who would be paying the huge increase in taxes?If the government use the import duties to lower the VAT rate on cars and they lower corporation tax on the business, no one will, it will be cost neutral.
RYH64E said:
loafer123 said:
Why not?
If they lower VAT as the other poster suggested to make it cost neutral for UK consumers then what's left? To be fair, as I said above, I think it likely that in the unlikely event this isn't sorted by a trade deal with the EU (because it is substantially in their interest to do so) then the subsidisation of export tariffs would be directly funded by the import tariffs recieved, with a net positive balance due to the trade deficit.
CaptainSlow said:
B'stard Child said:
jsf said:
Currently, any tariffs UK government take from none EU imports get sent 25% to the UK exchequer, 75% to the EU.
^ Why do more people not get this.......That's all tariffs from all goods from out side the EU
On the same subject - How much VAT do you think goes to the EU?
RYH64E said:
I'm all for lower tax on business, bring it on, but if the proposal is to assist UK based companies by redistributing the proceeds from import duties then the money has to come from somewhere, they can't make it cost neutral for consumers and subsidise business.
True.However, we will be free to reduce tariffs on non-eu products. Sugar will get cheaper and new world wines could be as much as 35% cheaper.
If you only concentrate on the negatives, then you won't be able to see the big picture.
JawKnee said:
You really are struggling here.
We are agreed there is no benefit. What your link fails to point out is what the disadvantages are in the long term. Lower IRs eventually mean lower NIMs. Even the Bank Of England have recently just admitted to as much.
http://www.telegraph.co.uk/business/2016/10/26/len...
Why don't we look at the actual speech rather than a rather poor news article?We are agreed there is no benefit. What your link fails to point out is what the disadvantages are in the long term. Lower IRs eventually mean lower NIMs. Even the Bank Of England have recently just admitted to as much.
http://www.telegraph.co.uk/business/2016/10/26/len...
http://www.bankofengland.co.uk/publications/Docume...
He doesn't mention net interest margins once. The only mention of interest rates is in terms of the way that they are hurting insurance companies.
It almost looks as if the journalists at the Telegraph misunderstood the speech and conflated it with some other unrelated stories to make their article. A classic case of 2+2 = 5. Did you go to the same maths class?
Edited by davepoth on Thursday 27th October 19:55
B'stard Child said:
I believe it was included in that "calculation"
On the same subject - How much VAT do you think goes to the EU?
50% of Gross National Income.On the same subject - How much VAT do you think goes to the EU?
http://ec.europa.eu/budget/explained/budg_system/f...
loafer123 said:
In the highly unlikely case that is not the case, the government could happily subsidise the tariffs on exports with the receipts (by far greater) that it would receive from German car manufacturers importing into the U.K.
This is the first example of why there will be a substantive deal on tariffs with the EU because it is to their massive advantage, given our trade deficit with them.
Is that not an argument for NOT doing a trade deal?This is the first example of why there will be a substantive deal on tariffs with the EU because it is to their massive advantage, given our trade deficit with them.
don4l said:
True.
However, we will be free to reduce tariffs on non-eu products. Sugar will get cheaper and new world wines could be as much as 35% cheaper.
If you only concentrate on the negatives, then you won't be able to see the big picture.
So, given the way sterling has tanked, the rise in prices will just be counteracted by reducing import duties. That's if there's any motivation for doing it at all. Tax money has to come from somewhere - reducing duty and cutting corporation tax has to be funded from elsewhere.However, we will be free to reduce tariffs on non-eu products. Sugar will get cheaper and new world wines could be as much as 35% cheaper.
If you only concentrate on the negatives, then you won't be able to see the big picture.
Jockman said:
loafer123 said:
In the highly unlikely case that is not the case, the government could happily subsidise the tariffs on exports with the receipts (by far greater) that it would receive from German car manufacturers importing into the U.K.
This is the first example of why there will be a substantive deal on tariffs with the EU because it is to their massive advantage, given our trade deficit with them.
Is that not an argument for NOT doing a trade deal?This is the first example of why there will be a substantive deal on tariffs with the EU because it is to their massive advantage, given our trade deficit with them.
don4l said:
I apologise for the tone of my reply above. I cannot see any justification for it. Sorry.
Business is very good at the moment.
Imports are costing more, so I have had to put up prices. This isn't a problem as all of my competitors are in the same boat. Domestic customers are either understanding, or unaware of the price rises.
On the export front, it feels busier. However, we don't do a huge amount, so it will take some time to be certain.
However, for July-Sept the figures do look pretty convincing.
July-Sept 2016 Thirteen orders with a value of £20.7k
July-Sept 2015, Five orders with a total value of £10.09k.
So, although the figures are low, they do seem to be pretty convincing.
Our overall profit margins are up.
October isn't quite over yet, but it is already the best month that we have had in two years. September was also quite good.
Cheers Don, appreciate your honesty - glad things are going well. Just to add to the current debate on car tariff, I found this graph quite useful.Business is very good at the moment.
Imports are costing more, so I have had to put up prices. This isn't a problem as all of my competitors are in the same boat. Domestic customers are either understanding, or unaware of the price rises.
On the export front, it feels busier. However, we don't do a huge amount, so it will take some time to be certain.
However, for July-Sept the figures do look pretty convincing.
July-Sept 2016 Thirteen orders with a value of £20.7k
July-Sept 2015, Five orders with a total value of £10.09k.
So, although the figures are low, they do seem to be pretty convincing.
Our overall profit margins are up.
October isn't quite over yet, but it is already the best month that we have had in two years. September was also quite good.
Source
http://webarchive.nationalarchives.gov.uk/20160105...
From basic maths it looks like we import approx. £30 billion EU cars generating £3 billion of HMRC revenue if WTO come in.
We export £12 billion into the EU, costing the UK motor industry £1.2 billion under WTO tariffs.
It looks like WTO could be quite a good deal for the UK in term of car manufacturing. Demand may decrease for EU cars in the UK admittedly, but the gov 'could' subsidise UK manufacture and UK prices??
The drop in the £ may also swing things in different directions.
Mike
PS I am a remoaner!
PPS I have probably missed something obvious too
CaptainSlow said:
Jockman said:
loafer123 said:
In the highly unlikely case that is not the case, the government could happily subsidise the tariffs on exports with the receipts (by far greater) that it would receive from German car manufacturers importing into the U.K.
This is the first example of why there will be a substantive deal on tariffs with the EU because it is to their massive advantage, given our trade deficit with them.
Is that not an argument for NOT doing a trade deal?This is the first example of why there will be a substantive deal on tariffs with the EU because it is to their massive advantage, given our trade deficit with them.
davepoth said:
B'stard Child said:
I believe it was included in that "calculation"
On the same subject - How much VAT do you think goes to the EU?
50% of Gross National Income.On the same subject - How much VAT do you think goes to the EU?
http://ec.europa.eu/budget/explained/budg_system/f...
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