VAT down to 15%??

[Satch]

Well, could be........

http://business.timesonline.co.uk/tol/business/economics/pbr/article5213582.ece

So if you were planning to buy something VATable costing more than a few squids on Sunday, don't.

 

[neilrr]

Bfd.

 

[andy_k]

for the short term it would make virtually everything cheaper but I wonder how it would apply in the real world.

OK, big, expensive items would drop in price, fuel would be cheaper therefore transport would cost less so in theory it could mean even more price cuts.

But......what about places like the corner cafe? They are charging VAT on their meals, will they reduce their prices or just take a few extra quid in profit every day?

 

[janner]

But......what about places like the corner cafe? They are charging VAT on their meals, will they reduce their prices or just take a few extra quid in profit every day?

We'll probably be closed all day while we redo all our menus.

NOT!


:bannana:

 

[Satch]

Bfd.

Oh. UDH82BME then

 

[Mudster]

Cut's around £1100 or so off the list price of a £50,000 car, which if you were in the market for a £50,000 purchase isn't going to be the difference between making it or not...it's just nice timing I guess.

I'm not wholly sure what this is trying to achieve? More retail spending I suppose....

Things are getting ugly on the front line, the poo really is hitting the fan and it's getting worse.

 

[Dryce]

I'm not wholly sure what this is trying to achieve? More retail spending I suppose....

A tad more retail spending?

I'm not sure what a 2.5% cut can achieve. Energy is a major household cost and it's handled on a separate rate - are they going to reduce that? Petrol gets VAT'ed at the full rate but is already coming down in price.

There's a slight improvement in cash flow for some business that spend and reclaim a lot, and a bit for businesses that have late payers and are liable for VAT before they get paid on their invoices.

One thing they can do is put the threat of an increase back to 17.5% out there to encourage people to spend sooner rather than later. By that argument they should maybe zero stamp-duty and then schedule 0.5% increases every 6 months for the next three years.

But how does this square with the things like increases in VED? That's probably done more real damage than a 2.5% VAT reduction can fix.

 

[grober]

Eec Directives?

VAT is a hugely insidious tax since its virtually on everything- goods and services- so its almost impossible to avoid legitimately. However I suspect that reducing VAT to 15% may well have more to do harmonising VAT rates across the EEC due to incoming directives from Brussels?? http://ec.europa.eu/taxation_custom...tion/vat/how_vat_works/rates/vat_rates_en.pdf
and http://ec.europa.eu/taxation_customs/taxation/vat/how_vat_works/rates/index_en.htm

 

[recycled]

there is no money to spend so cutting VAT is rubbish. 15% of no money to spend is no money to spend.

 

[AANDYY]

And then when this gimmick has jooped everyone, they'll put it up to 20% to pay it all back then never reduce it back to 17.5%!

They should remove it from gas and electric, scandalous, I thought VAT was introduced for luxury's?

 

[nick mercedes]

Cut's around £1100 or so off the list price of a £50,000 car, which if you were in the market for a £50,000 purchase isn't going to be the difference between making it or not...it's just nice timing I guess.

I'm not wholly sure what this is trying to achieve? More retail spending I suppose....

Things are getting ugly on the front line, the poo really is hitting the fan and it's getting worse.

Cutting business rates, or removing them altogether would be more help.

 

[neilrr]

Wasn't it retail spending & the debt that funded it that got us into this mess?

If that's even partly true it seems a strange cure & indicates to me the idea cupboard is frighteningly bare.

 

[daveuj]

vat is on snacks (crisps peanuts)sounds good to me.

 

[Ade B]

I find this a bit worrying - if your business is on a cliff edge, is 2.5% less Vat going to stop it falling over... Also is making things a fraction cheaper going to make people buy that PS3 after all?

Whilst I don't think the state should sit back and watch the economy flounder, I'm not convinced that trying to temporarily shore up bad habits is the way forwards.. I found out last week that I'm currently losing money on my (meagre) savings due to the interest rate drops vs inflation..

Where's this all heading?



Ade

 

[NewMB]

I agree, cutting the VAT to 15% (or whatever) isn't going to help that much.

I would have much rather seen that they cut company tax (ie on profits) and the 12% or so nat insurance compannies pay + re-introduce company cars as being VAT reclaimable. Would help alot of companies this way + boost car sales.

 

[Ian B Walker]

Cutting business rates, or removing them altogether would be more help.

I agree, cutting the VAT to 15% (or whatever) isn't going to help that much.

I would have much rather seen that they cut company tax (ie on profits) and the 12% or so nat insurance companies pay + re-introduce company cars as being VAT reclaimable. Would help a lot of companies this way + boost car sales.

I totally agree. Anything to assist the small business (or larger if it comes to that) has to be worth considering.

 

[C240Sport97]

we have lived beyond our means for years, and that is the reason for the mess we are in now.

so, let's live beyond our means for a bit longer (tax cuts etc, these have to be paid for in the future if there is no corresponding cut in government expenditure), and cross all our fingers and much else, and hope against hope.

logical eh??

 

[Dryce]

I would have much rather seen that they cut company tax (ie on profits) and the 12% or so nat insurance compannies pay + re-introduce company cars as being VAT reclaimable. Would help alot of companies this way + boost car sales.

Cutting corporation tax doesn't make much difference if profits are down.

Cutting employer's NI by 1% is more significant to service related businesses.

One simple mechanism is not to change taxes for business at all but change when it is paid - eg. allow an extra month for NI/PAYE, VAT, and corporation tax payments.

Technically the company doesn't save anything and HMG doesn't lose anything apart from a small amount of interest. But the impact on cash flow for many businesses would be significant.

 

[Meldrew2]

Removing the vat from gas and electricity would be more useful.....

 

[wemorgan]

If VAT is reduced to 15%, then what about all those small business' on the flat rate scheme? Unless those bands are also reduced by the same amount then a VAT reduction will actually mean some business' are worse off. As ever the devil will be in the detail.