VAT increase

[briSk]

Any views on when the (inevtiable) VAT increase would come in post budget?
how long would retailer have to sort systems out etc.

i'd like to know for general interest and work (but also we need a new boiler..!)

[worsy]

It's likely to be a month end so I would discount immediately, however it could be as soon as June 30th, although won't be retrospective for obvious reasons.

My guess, and this is just a personal opinion is that it will happen year end.

[DonkeyApple]

My understanding is as follows:

Every 1% increase nets £5bn.
European average is 23%.
As a tax it is pretty elastic.

My personal view on the above: Whack it up to 23/25%.

Branded properly, i.e maintain the official level at 17.5 and refer to the addition as a temporary, puppy saving benefit.

[worsy]

Harsh! I think the Euro average is around 19-20% so I'd imagine an increase to that sort of figure is likely.

However I like your approach, i think they should do that for income tax, whack the lower rate up to 22% and target a reduction over the life of the parliament. They could increase the PA to near the promised 10k to help those on lower incomes.

[worsy]

Actually 20% by the looks of this

http://www.thisismoney.co.uk/tax/tax-tables/articl...

[DonkeyApple]

worsy said:

Actually 20% by the looks of this

http://www.thisismoney.co.uk/tax/tax-tables/articl...

Fair dos. Do any of them have other taxes on top of VAT? I seem to recall some European countries having a sales tax, or similar on top of VAT?

The nice thing about VAT is that it is partly optional in so much as food and clothing are exempt so you are able to within reason control your personal liability.

Also, Johnny Foreigner pays it when he's over here because of our weak pound buying hideous H A Rodds corner shop tat.

Personally, I would favour an over all 'emercency' packet where, with the exception of where it will hit the poorest, all taxes go up by 5% and all spending is cut 5%, regardless. Whatever selective taxes you raise half the country will bleat, so fk everyone, fk them equally, and fk them nicely. The whole package can be packaged up as the 'Patriot Act' and so anyone who speaks out against it is clearly a terrorist. I'm sure that has worked before.

[worsy]

Only children's clothes are exempt.

[DonkeyApple]

worsy said:

Only children's clothes are exempt.

Even better. Could add an additional tt Tax on things like designer products which are not designed by the designer and made in the same Chinese factory as George and ASOS. Don't see why all the 'Retard Margin' should go to the mincing bloke who owns the company.

[V88Dicky]

Just put up taxes on non British-made goods. Obviously don't tell anyone, but do it nevertheless.

[Eric Mc]

DonkeyApple said:

worsy said:

Actually 20% by the looks of this

http://www.thisismoney.co.uk/tax/tax-tables/articl...

The nice thing about VAT is that it is partly optional in so much as food and clothing are exempt so you are able to within reason control your personal liability.

No.

SOME foods (and it's amazing which ones are and which ones aren't) and all children's clothing are ZERO RATED for VAT purposes. They are NOT VAT Exempt.

There is a fundamental and very important distinction between an item being Zero Rated and being VAT Exempt.

[king arthur]

Eric Mc said:

SOME foods (and it's amazing which ones are and which ones aren't)

Isn't it that cakes are but biscuits aren't, hence the long running dispute between United Biscuits and HMRC over whether they should have to pay VAT on sales of Jaffa Cakes because HMRC wanted to define them as biscuits?

[Legend83]

king arthur said:

Eric Mc said:

SOME foods (and it's amazing which ones are and which ones aren't)

Isn't it that cakes are but biscuits aren't, hence the long running dispute between United Biscuits and HMRC over whether they should have to pay VAT on sales of Jaffa Cakes because HMRC wanted to define them as biscuits?

Yes.

[F i F]

You just knew when opening the thread we's end up discussing Jaffa cakes.

My prediction for a long time has been 22.5%.

I suspect it will be 22.5% for some things and some things which are currently zero rated, looks nervously in Eric's direction, will have something put onto them. Maybe only 5% maybe as much as 10%.

[Eric Mc]

king arthur said:

Eric Mc said:

SOME foods (and it's amazing which ones are and which ones aren't)

Isn't it that cakes are but biscuits aren't, hence the long running dispute between United Biscuits and HMRC over whether they should have to pay VAT on sales of Jaffa Cakes because HMRC wanted to define them as biscuits?

That is only one example. There have also been disputes over the following -

different types of snack and crisp products

whether the sale price of a tin of biscuits should be split between the tin purchase and the contents

whether meals served on UK registered airliners constitute a separate service to the provision of the flight itself

whether a balloon ride qualifies as "travel services"

when is an atlas an atlas or a map

when is a brochure a leaflet or a book

whether paying for an eye test as part of the purchase of new spectacles should be VAT exempt or not

VAT gets extremely detailed when you look into it.

Edited by Eric Mc on Thursday 10th June 15:19

[DonkeyApple]

musclecarmad said:

i'd love very high vat rates 27.5% would suit me.

Are you running a carousel fraud?

Thanks McE..

[sparkythecat]

I can't that believe on PH, some members think having to pay HMG more tax on all things automotive is a good thing.

I propose instead, that we increase the tax on sandals, lentils, yoghurt, and yurts.

Furthermore, a substantive annual licence fee should be introduced for beards.

[Eric Mc]

sparkythecat said:

Furthermore, a substantive annual licence fee should be introduced for beards.

I shaved mine off a few months ago.
Do I get a refund?

[Sticks.]

So VAT goes up and with it the rate of inflation, followed by the interest rate to counter inflation. Then mortgages are more expensive, so wage demands are higher, and business' have higher overheads, so prices go up, which increases inflation, so people spend less, which is the absolute best way to get out of a recession.

What could possibly go wrong?

[-Pete-]

Sticks. said:

So VAT goes up and with it the rate of inflation, followed by the interest rate to counter inflation. Then mortgages are more expensive, so wage demands are higher, and business' have higher overheads, so prices go up, which increases inflation, so people spend less, which is the absolute best way to get out of a recession.

What could possibly go wrong?

What would you do to stop the country spending more than it 'earns'?

[Sticks.]

-Pete- said:

Sticks. said:

So VAT goes up and with it the rate of inflation, followed by the interest rate to counter inflation. Then mortgages are more expensive, so wage demands are higher, and business' have higher overheads, so prices go up, which increases inflation, so people spend less, which is the absolute best way to get out of a recession.

What could possibly go wrong?

What would you do to stop the country spending more than it 'earns'?

Absolutely, difficult question, and I suspect one which would have been better dealt with some years back.

My instinct is the more people you have in work, the more they spend (esp those on low incomes) and the more business will prosper. Keep interest rates low, policies to encourage SME's and prob some credit controls, off the top of my head.