View Full Version : Brace yourselves
VAT rises tonight to 20%
but plans are in motion to raise it to 30% should it be necessary
Now consider this- a pensioner or someone on a relatively low income pays this amount- as does a high earner
To my mind a penny on income tax of high earners would make more sense- rather than a tax on spending. Small businesses just within the threshold of VAT suffer- and this might be the death rattle of many.
VAT isn't an easy tax for the layman to calculate- as some items are exempt and others are not in your supermarket basket. Obviously bigger purchases will cost more- but think about how the additional 3p per litre of petrol is going to hit your purse.
Anyone actually notice a difference when it went down by 2.5%? Why will VAT going up by 2.5% be such a big deal?
bagpuss why worry about it there is nothing we can do about it regardless of what government is in the uk is in a huge debt it has to be dealt with we just have to plod on with things
but plans are in motion to raise it to 30% should it be necessary
I think that's scaremongering. I'd be vey surprised if there's any truth in it.
As a 40% tax payer I think I already pay enough.
The good thing with VAT is that you only pay it based on your spending. Those not buying "luxury" goods, and those saving money rather than spending won't be hit so hard.
VAT rises tonight to 20%
but plans are in motion to raise it to 30% should it be necessary
Now consider this- a pensioner or someone on a relatively low income pays this amount- as does a high earner
To my mind a penny on income tax of high earners would make more sense- rather than a tax on spending. Small businesses just within the threshold of VAT suffer- and this might be the death rattle of many.
VAT isn't an easy tax for the layman to calculate- as some items are exempt and others are not in your supermarket basket. Obviously bigger purchases will cost more- but think about how the additional 3p per litre of petrol is going to hit your purse.
I've not heard anything about a possible 30% VAT rate; can you post link?
Bagpuss you are scaremongering.
No grubbiement is going to put VAT up to 30% because it would stop the economy dead in its tracks.
Theone – your assertion that, “Those not buying "luxury" goods, and those saving money rather than spending won't be hit so hard.” The 2.5% increase in VAT will affect everyone who buys anything other than children’s clothes and foodstuffs. That means the next time you fill up your car, buy a new pair of shoes, visit the theatre or have a tradesman to sort out something around your house you will be paying extra for it.
In addition – consider this – everything including children’s clothing and foodstuffs has to be transported from the point of manufacture to the point of sale. Transportation costs will increase and that increase will be passed on to all and every customer.
It follows than that the poorest, including many pensioners will find they will be paying proportionally more of their income to the exchequer than the better off. People on salaries of £30K might just shrug off this VAT increase, but those on less than £12K are going to suffer.
Someone somewhere said 2011 was going to be rough but it will get much better in 2012 – I can’t see it myself because I can’t remember a grubbiement that made any significant reduction to any taxes.
Scarybiscuits03
04-Jan-11, 00:37
This has always made no sense - why should someone that has worked hard to get where they are pay more tax because they earn more? They worked for it so they deserve it - if u wanna live life without working then thats ur choice......u are what u are!!!
By the way I was commenting on the 40% tax but forgot to quote!!!!
If the public can grasp the fact that food, heat and light are the essentials, rather than Laptops, Plasma TVs and £500 mobile phones, then I think we should ride the storm out all right. We are constantly bombarded with adverts encouraging us to live beyond our means. I don't know how my Parents coped back in the 70's...Oh wait, I DO know... they spent what they earned and learned a magic word that never seems to be aired much now......NO!!
Gronnuck,
I understand everything you say, yes it will affect us all but the fact is the country is broke.
We need to raise money through taxation one way or the other, I think everyone can see that.
By increasing VAT you are taxed based on how much you spend. I personally think that is a fairer way of taxing people than taking what they earn. Maybe if people saved more and lived in debit the credit crunch wouldn't have happened in the first place.
The thing I'm more worried about than the 2.5% increase is that the shops will use it as an excuse to boost prices a lot higher. I'm pretty confident that any "rounding" of the new prices will be up, to the benefit of the businesses.
fingalmacool
04-Jan-11, 02:11
Ah my fellow orgers, in situations like what we find ourselves in that we have little control of it is sometimes better to "bend over and unclench" and let the government have their way with you. So onwards and who knows?
orkneycadian
04-Jan-11, 10:08
If the public can grasp the fact that food, heat and light are the essentials, rather than Laptops, Plasma TVs and £500 mobile phones, then I think we should ride the storm out all right.
Tis true. Although its pretty hard to follow (VAT is a right nightmare if you are a trader), generally, the real essentials in life are generally either zero rated, exempt or reduced rate (5%). (Yes I know, theres zero rated and exempt! :confused)
The list of things that are not charged at standard rate is massive - Childrens clothes and foodstuffs are just 2 high profile examples. For example, there is no VAT on insurance premiums or mobility aids for the elderly or disabled. Similarly, no VAT is charged on public transport fares, which takes a lot of the argument out of VAT on petrol/diesel (for public who could use public transport, obviously)
I don't know how my Parents coped back in the 70's...Oh wait, I DO know... they spent what they earned and learned a magic word that never seems to be aired much now......NO!!
Sound advice. Ive had one loan in my life for £300 when I was 17 and ended up paying £500 back as it was from an estate agent because no banks were willing to deliver the readies. If I want something now I either save for it or do without.
Is it too late to build a house of loaves on a Tesco trolley and run around the petrol pumps shouting "Panic buy! Panic buy!?"
Stargazer
04-Jan-11, 14:12
If the public can grasp the fact that food, heat and light are the essentials, rather than Laptops, Plasma TVs and £500 mobile phones, then I think we should ride the storm out all right. We are constantly bombarded with adverts encouraging us to live beyond our means. I don't know how my Parents coped back in the 70's...Oh wait, I DO know... they spent what they earned and learned a magic word that never seems to be aired much now......NO!!
Heat and light are taxed at 5%. It an 'environmental tax' not VAT so thats ok.:mad:
orkneycadian
04-Jan-11, 14:18
And that 5% rate hasn't changed for years!
Bagpuss you are scaremongering.
No grubbiement is going to put VAT up to 30% because it would stop the economy dead in its tracks.Indeed it would and the current chancellor of course knows it. But he might conceive of doing it to achieve his dogmatic goal of cutting back the state by convincing the populace that it's necessary to cut the deficit. He's got away with it so far and I can't see any coherent counter argument coming from Ed and his shadow chancellor. Perhaps Labour's economic modelling doesn't support faster recovery based on smaller cuts and hence higher tax revenues due to faster expansion after all. :(
Theone – your assertion that, “Those not buying "luxury" goods, and those saving money rather than spending won't be hit so hard.” The 2.5% increase in VAT will affect everyone who buys anything other than children’s clothes and foodstuffs. That means the next time you fill up your car, buy a new pair of shoes, visit the theatre or have a tradesman to sort out something around your house you will be paying extra for it. Absolutely. Believing that food and warmth can be provided at nearly current levels without all the other things that make up our economy is the sign of true naivety.
In addition – consider this – everything including children’s clothing and foodstuffs has to be transported from the point of manufacture to the point of sale. Transportation costs will increase and that increase will be passed on to all and every customer.Yes but how much of that extra VAT feeds through to the end buyer? I thought the idea of VAT was that companies 'adding value' to goods could claim it back and only the end buyer pays the tax. An opinion from a tax expert would be useful here.
Someone somewhere said 2011 was going to be rough but it will get much better in 2012 – I can’t see it myself because I can’t remember a grubbiement that made any significant reduction to any taxes.The Thatcher government in the 1980s reduced income tax enormously. It not only abolished the ridiculously high top rates it inherited from previous governments but it introduced big cuts in the standard rate of income tax. It put up some other taxes like VAT and National Insurance but the overall tax burden was I think reduced significantly in the 1980s. Especially in the latter part. Ronald Reagan had done similar things in America.
Anyways, the 'better' 2012 that Cameron and his pals are wishing for will not mean lower taxes. I don't know what they think will be better about it. Does anyone?
[QUOTE=crayola;805063]Yes but how much of that extra VAT feeds through to the end buyer? I thought the idea of VAT was that companies 'adding value' to goods could claim it back and only the end buyer pays the tax. An opinion from a tax expert would be useful here.
QUOTE]
Not a tax expert I am afraid, well, I'm an expert at paying it. But you are correct, transport companies will claim back the additional VAT they pay on fuel, vehicles, equipment, washroom supplies paperclips etc. so no reason any goods should increase beyond the extra tax they themselves generate.
[QUOTE=bagpuss;804892]
Small businesses just within the threshold of VAT suffer- and this might be the death rattle of many.
Why?
Yes but how much of that extra VAT feeds through to the end buyer? I thought the idea of VAT was that companies 'adding value' to goods could claim it back and only the end buyer pays the tax. An opinion from a tax expert would be useful here.
Not a tax expert I am afraid, well, I'm an expert at paying it. But you are correct, transport companies will claim back the additional VAT they pay on fuel, vehicles, equipment, washroom supplies paperclips etc. so no reason any goods should increase beyond the extra tax they themselves generate.Thanks ducati. That's how I thought it worked.
Even so, it won't stop the unscrupulous from increasing prices and using VAT as an excuse. They would find some other excuse if the VAT rise hadn't come along.
The 30% comes from a Tory Party conference workshop that a neighbour attended (Tory councillor in London)- it was mooted as an alternative to the higher income tax rate that might scare our poor banking folk off to foreign parts. incidentally relative who works in banking took himself off to avoid the snow on a Carribbean cruise to spend part of his 6 figure sum bonus- and had a lovely time (so he tells me). he enjoyed himself so much he's bought a sailing boat and a berth in Plockton to enjoy it
I'm assuming that Ducati is a lover of two wheeled motor transport- and thus fills his tank now and then. His 3p a litre extra won't add up too much on petrol consumption- but add that on to haulage- and the price of everything rises- while most folk's income (bankers exempt) doesn't.
Now I'm prepared to leave business to people like my other half (who along with his accountant is a dab hand at tax avoidance - rather than evasion) - but your part of the world will be hit just that little bit harder with such rises.
Heat and light are taxed at 5%. It an 'environmental tax' not VAT so thats ok.:mad:
It is NOT VAT, so how do you manage to try to bring it into a conversation about VAT? Mad icon? Mad indeed!!
It was estimated today that the increase in VAT will mean that the average family will be £220 per year worse off. That is about 60p per day. BRACE YOURSELVES!!
The 30% comes from a Tory Party conference workshop that a neighbour attended (Tory councillor in London)- it was mooted as an alternative to the higher income tax rate that might scare our poor banking folk off to foreign parts. incidentally relative who works in banking took himself off to avoid the snow on a Carribbean cruise to spend part of his 6 figure sum bonus- and had a lovely time (so he tells me). he enjoyed himself so much he's bought a sailing boat and a berth in Plockton to enjoy it
I'm assuming that Ducati is a lover of two wheeled motor transport- and thus fills his tank now and then. His 3p a litre extra won't add up too much on petrol consumption- but add that on to haulage- and the price of everything rises- while most folk's income (bankers exempt) doesn't.
Now I'm prepared to leave business to people like my other half (who along with his accountant is a dab hand at tax avoidance - rather than evasion) - but your part of the world will be hit just that little bit harder with such rises.Politicians of all hues throw crazy ideas about at meetings and rule them out after open discussion. And rightly so.
As for the VAT increase on fuel....
Either you have posted without reading this thread or you know better than ducati and I. Which is it?
There is another alternative or perhaps even two but I shall save them for the next post. If necessary......
Politicians of all hues throw crazy ideas about at meetings and rule them out after open discussion. And rightly so.
Very true. To find the best solution a number of alternatives must first be compared.
Discussing something and making it government policy are two completely different things.
I'm sure wholescale cuts of incapacity benefit and jobseekers allowance have been discussed, but, for the meantime, will remain on the "back burner".
At the same workshop, the tuition fees debate was also raised - another idea that would never actually come to pass
Lots of decisions are often made in back rooms by people who aren't even MP's but have their own agenda.
Just like people who air their views on here?
I know lots of people who are spitting feathers at the prospect of working to 67 before they are eligible to retire- and that came from party conference workshops of all hues and mindsets
I know lots of people who are spitting feathers at the prospect of working to 67 before they are eligible to retire- and that came from party conference workshops of all hues and mindsets
That is going to happen, and it will be well above 67 before long too. But remember, nobody is stopping anybody from retiring when they wish, they just won't be entitled to a state pension. If you have suitable private pension arrangements or savings you should be ok.
The number of pensioners in comparison to working tax payers is rising all the time and it's only going to get worse when the post war "baby bloomers" are retiring. The cost to the NHS is also going to cause big problems too.
I predict major policy changes, regardless of who is in power, over the next decade or so with regards to the NHS/national insurance and social welfare.
so might it be safe to say that you'd support withdrawal of NHS services for the over 60's?
Euthanasia?
The return of the workhouse?
introduction of compulsary private medical insurance?
Abolition of retirement with state pension?
all of which could be avoided with even a modest increase in income tax or bank levy?
so might it be safe to say that you'd support withdrawal of NHS services for the over 60's?
Euthanasia?
The return of the workhouse?
introduction of compulsary private medical insurance?
Abolition of retirement with state pension?
all of which could be avoided with even a modest increase in income tax or bank levy?
Not at all bagpuss, you misunderstand me.
I'm not offering a solution, I'm just pointing out the impending problem. I think a lot of people are naive or don't want to address the issues yet.
I've no idea how "modest" any increase in income tax would have to be, but as the working population shrinks in comparison with that of non-tax payers it can only grow.
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