Vat Rise Of 2.1%

[Pick It Down]

Who's going to be the first one to catch someone say the VAT rise is hideous, but who had also defended the policy of printing money?

[_w_]

Will the rise not affect how much people spend? Effectively cancelling out any gain?

Funny how the laughing curve fails to apply to taxes that hurt the poorest hardest.

[winkie]

Funny how the laughing curve fails to apply to taxes that hurt the poorest hardest.

It is possible to live VAT free.

[Pick It Down]

Will the rise not affect how much people spend? Effectively cancelling out any gain?

The more the rise affects how much people spend, the more the producer will have to bear some of the cost.

[plummet expert]

Funny how the laughing curve fails to apply to taxes that hurt the poorest hardest.

The rise in VAT is unavoidable. However, the personal tax alowance went up £1k and child tax credit was increased. Giving with one hand and taking away with the other!

The surprise IMHO is that public sector pay was not cut across the board. It will actually mean, with 25% dept cuts, more people will be made redundant in both local and central govt.

[_w_]

It is possible to live VAT free.

You forced me to think here.

But it would bring 0 tax in.

[_w_]

It will actually mean, with 25% dept cuts, more people will be made redundant in both local and central govt.

They're only going to look into the 25% cuts, and talk about them...

I'll believe it when I see it and I don't now.

[winkie]

You forced me to think here.

But it would bring 0 tax in.

Look forward to using the services of the small business that are below the VAT threshold.

[19 year mortgage 8itch]

Will the rise not affect how much people spend? Effectively cancelling out any gain?

What if...

Taxes were set to limit consumption rather than generate revenue? Dun, dun, duuuuuuuuuuuuuuuuuuh!

[Nickolarge]

Funny how the laughing curve fails to apply to taxes that hurt the poorest hardest.

VAT rises are ok if you earn a decent amount more than you need to spend.

As you have pointed out that is not the poorest.....but I'm not poor by any means and I still have no spare cash at the end of the month.

VAT favours the wealthy and the Tories put it up last time they regained power.

Just another example of exactly who the Conservatives really look after.

And also, if we are in such dire straits how is it that they can still find the cash for some handouts or any handouts for that matter.

[Guest happy?]

Who's going to be the first one to catch someone say the VAT rise is hideous, but who had also defended the policy of printing money?

Explain to me how VAT has risen 2.5% - is this the new Tory economics at work?

Go back, do your homework properly.

See me when you've learned to count.

[ken_ichikawa]

VAT rises are ok if you earn a decent amount more than you need to spend.

As you have pointed out that is not the poorest.....but I'm not poor by any means and I still have no spare cash at the end of the month.

VAT favours the wealthy and the Tories put it up last time they regained power.

Just another example of exactly who the Conservatives really look after.

And also, if we are in such dire straits how is it that they can still find the cash for some handouts or any handouts for that matter.

How do you work that out?

If you get £1000 extra tax free and NIC free you get £320 extra in your pocket as you do not pay tax or NIC on the enhanced personal allowance.

If you spend £1000 + VAT it would have been 175 VAT now its £200..

Therefore you have + £120

Your anology is also wrong VAT is for the most part avoidable, the only real VAT I pay right now is on energy and thats about it. Cold fresh food over the counter has no VAT on it.

2 years ago Labour removed the 10% tax band increasing poor people's income tax by a fair bit, did you complain about that or are tories the only people who can do evil?

Not to mention the annilation of pensions and the fact that QE robs poor people by causing inflation too, or does that not count?

Edited June 22, 2010 by ken_ichikawa

[Alan B'Stard MP]

It is possible to live VAT free.

Not really. But there is a lot of 97% VAT free dairy stuff out there. It's usually written large on the front of the packaging.

[Hip to be bear]

Look forward to using the services of the small business that are below the VAT threshold.

Non VAT registered business cannot claim back the VAT on items that they buy, so there is still VAT incorporated in what you buy from them, just at an earlier stage.

[Nickolarge]

How do you work that out?

If you get £1000 extra tax free and NIC free you get £320 extra in your pocket as you do not pay tax or NIC on the enhanced personal allowance.

If you spend £1000 + VAT it would have been 175 VAT now its £200..

Therefore you have + £120

Your anology is also wrong VAT is for the most part avoidable, the only real VAT I pay right now is on energy and thats about it. Cold fresh food over the counter has no VAT on it.

2 years ago Labour removed the 10% tax band increasing poor people's income tax by a fair bit, did you complain about that or are tories the only people who can do evil?

Not to mention the annilation of pensions and the fact that QE robs poor people by causing inflation too, or does that not count?

I don't pay any income tax or NIC's. I'm a househusband.

[Nickolarge]

It is possible to live VAT free.

VAT makes up part of the price of almost everything you can buy even if the item itself is VAT exempt.

[libspero]

The good news is that they didn't remove the VAT exemption on essentials (which was discussed in the run up to the budget).

If it incentives healthier eating and penalises wasteful consumption I don't see it as a terrible tax.

VAT makes up part of the price of almost everything you can buy even if the item itself is VAT exempt.

Explain?

Edited June 22, 2010 by libspero

[Hip to be bear]

VAT makes up part of the price of almost everything you can buy even if the item itself is VAT exempt.

How so? I am not sure that you understand how VAT works.

[XswampyX]

Explain to me how VAT has risen 2.5% - is this the new Tory economics at work?

Go back, do your homework properly.

See me when you've learned to count.

More like 14.29%

It's the VAT bombshell talked about on here about 2 years ago.

[OnlyMe]

How so? I am not sure that you understand how VAT works.

The price of goods includes costs for production / shipping / storage / sale and all the staff costs involved with those. Put VAT up and even though some of it is reclaimable then the goods you buy are increased in price whether the VAT is directly on the price of the item you buy or not.

Even the price of second hand goods to some extent reflect the cost of new and so would tend to rise with the increasing price of new items.

[Hip to be bear]

The price of goods includes costs for production / shipping / storage / sale and all the staff costs involved with those. Put VAT up and even though some of it is reclaimable then the goods you buy are increased in price whether the VAT is directly on the price of the item you buy or not.

Even the price of second hand goods to some extent reflect the cost of new and so would tend to rise with the increasing price of new items.

Any company involved in producing something that goes in to the supply chain, to be purchased by a consumer, pays VAT on all the services, components etc that they use to produce and deliver the item. They can claim back all of that VAT, but they have to charge VAT on their invoice when they sell it. At the next stage of the supply chain, the wholesaler (for example) pays VAT on the item and any other products or services that he uses / purchases. He can claim all of that back. He too has to charge VAT on his invoice. He sells to a retailer, who does the same. The retailer sells to a consumer who pays the VAT on the retail price (currently 17.5%). All the VAT charged earlier in the supply chain is reclaimed by the purchaser at the next stage. After all the payments and reclaims, the only VAT that HMRC actually gets to add to its coffers is the VAT paid by the final consumer.

As far as I can see, and I may be wrong, the only exceptions are those involved in food production and childrens clothes. They pay VAT on their fuel, packaging, transport and other services, but they cannot claim it back as they do not have anything to offset it against. Am I right in assuming that you can not be VAT registered if your business is solely involved in non vatable food production? Would a childrens clothes manufacturer be well advised to also sell adult clothes, in order to reclaim the VAT paid?

As a restaurateur (now ex), we used to get hit quite hard by big VAT bills as most of our purchases were no vatable, but we put on a larg mark up to cover big overheads, and therefore used to have sizeable VAT bills every quarter.

It raises an interesting question.....If you were a farmer and had a farm shop, if you sold lots of VATable items in your farm shop, could you then reclaim all of the VAT you had paid to suppliers and service providers

[right_freds_dead]

the vat rise is the governments way of taking a huge dump on everybody, while giving the savings from the cuts.

- directly to banks -

stupid people here...

[Dubai]

I admit that I'm rubbish at maths.... but the vat rise is actually just over 14%, isn't it?

[Johnny Storm]

I don't pay any income tax or NIC's. I'm a househusband.

Neither do I, the joys of being an IT consultant with my own accountant to minimise the money wasted on tax. Nice to hear corptax is going down too.

[Guest happy?]

I admit that I'm rubbish at maths.... but the vat rise is actually just over 14%, isn't it?

Correct.

Both you and Xswampy can award yourself a VAT free jaffa cake.

Like most forms of indirect taxation "it's the poor what pays the price".

Whilst technically it's possible to avoid foodstuffs which don't have VAT on them as they're essentials, a surprising range of things do attract VAT. A recent trip to Makro confirmed that you're required to pay it on orange juice but not milk.

As I recall small-businesses with a turnover of less than X aren't registerable for VAT so they pay it regardless and it's passed onto the consumer in the supply chain.

Whilst the wealthy contribute more in VAT in absolute terms (because they buy more VATable stuff) those on lower incomes pay massively higher taxes in VAT because it forms a far higher proportion of their total disposable income.

VAT is a regressive form of taxation whichever way you slice and dice it. For those on very low incomes i.e. who don't pay income tax they've just seen their tax rise 14.% with no compensatory reduction in National Insurance contributions. Those on slightly higher incomes have had their incomes jiggled about a bit but they will still overall be paying more tax - furthermore VAT rises are introduced in January and NI changed in April.

Those who think VAT has risen by only 2.5% really don't understand either the maths behind it or how big an effect this increase in regressive taxation has on those struggling to cope financially.

Edited June 23, 2010 by happy?