O/T THE VAT HIKE

[mrpotatohead]

I believe VAT is an absolute joke, but it is what it is, a tax on spending that does not hit food and clothing, it is not a stealth tax, and if we all accept that toffs paying more vat on the golf club fees bails the nation out, so be it

[shrimpnsave]

i personaly thought the budget was quite fair

[mrpotatohead]

Me too, if you spend too much pay the going rate of tax, tighten your belt, put your tin hat on, trust the coalition to sort out the banks

[shrimpnsave]

Me too, if you spend too much pay the going rate of tax, tighten your belt, put your tin hat on, trust the coalition to sort out the banks

coalition doesnt excist anymore....have you noticed how clegg doesnt speak anymore

rubber stamped by the (sold down the river brigade without a paddle)

[mrpotatohead]

4 legs good, two legs bad

[shrimpnsave]

4 legs good, two legs bad

haha ive got a middle clegg as well

[Christies Child]

£2.50 extra on every £100 we spend doesn't seem excessive to me.

At least the essentials of life are VAT free.

Notice how reluctant the opposition are to tell us their alternatives? In my opinion they would have done exactly the same to raise monies to pay off the debt.

[Heysham_Shrimp]

A lot of the high street shops will absorb the 2.5% increase in VAT without adjusting prices.

[Keith]

£2.50 extra on every £100 we spend doesn't seem excessive to me.

At least the essentials of life are VAT free.

I always considered clothing to be rather an essential.

The problem with hiking VAT is that it hits poor people disproportionately compared to middle & high earners. In very simplistic terms, if you earn £100,000 per year and save £20,000 then you pay an extra 2.5% on the 80% of your spending. If you have an income of £20,000 per year but can't afford to save anything, then you pay an extra 2.5% tax on 100% of earnings. A straight 2.5% on income tax would have hit the middle earners and rich more than the poor because of the tax threshold before tax on earnings is paid.

On an Isle of Man basis, our politicians will be delighted. We have a VAT agreement to maintain the percentage as the same as in the UK, so our income goes up but they get to blame you lot for it.

[Keith]

A lot of the high street shops will absorb the 2.5% increase in VAT without adjusting prices.

What 'high street shops'? ASDA, Dixon's and Sainsbury's will absorb most, if not all the increase but those high street shops that are barely surviving may not be able to do so, so many who are barely surviving will go under as people spend less and/or they become less competitive. 'High streets', such as the centre of Morecambe will become ever increasingly deserted or 'charity shop' inhabited over the next decade.

[scar]

A lot of the high street shops will absorb the 2.5% increase in VAT without adjusting prices.

Most of the High Street Shops WILL NOT absorb the 2.5 point increase in VAT. What you will see is a gradual increase in prices for the rest of this year for the stores to then put up big banners in January saying they have absorbed the VAT rise.

Places like the supermarkets will also put prices up on various items but keep lead items priced artificially low, items that you would buy every day.

It does bring us in to line with the majority of European Countries though who are on 20% VAT.

[P/T Indie]

I agree it's not that bad £2.50 for ever £100 is not that bad and they are increasing the tax allowence so it balances its self out.

Would rather VAT goes up instead of income tax going up.

and who on earth claims over £1600 a month in housing benefit even down south surley you can pick up something cheaper than that.

[Christies Child]

On your average weekly spend not including food, how much do you reckon you spend on items that are subject to VAT? I did my own calculation and I was surprised how little it actually was.

[stevanshrimp]

I have cut out the crisps and choccy biccies. (VAT?) So i will save money.

[Keith]

On your average weekly spend not including food, how much do you reckon you spend on items that are subject to VAT? I did my own calculation and I was surprised how little it actually was.

yes, well, helicopters and aircraft purchases or charters are exempt from VAT but chocolate biscuits will be 20% VAT. Obviously wouldn't want the owners of private jets or 'copters paying tax on them would we?

[captain sparkle]

Will the pound shops have to be called
'pound and tuppence (roughly, after rounding off)'
shops?

[RedRedWine1]

You should purchase Jaffa cakes instead of chocolate biscuits Keith, as Jaffa cakes are zero rated! Problem solved.

[Jack Poulton]

So why are national newspapers (sorry "opinion sheets") VAT free? Surely they are not essential. Bringing them into the VAT family could raise quite a bit but why anyone still buys them is beyond me and why they still retain so much power is a scandal. Won't effect me though as I stopped buying them when teletext was invented and I haven't missed them.

[Christies Child]

So why are national newspapers (sorry "opinion sheets") VAT free? Surely they are not essential. Bringing them into the VAT family could raise quite a bit but why anyone still buys them is beyond me and why they still retain so much power is a scandal. Won't effect me though as I stopped buying them when teletext was invented and I haven't missed them.

Nor have I

[wijit]

The vast majority of shops will not just absorb this. 2.5% is a substantial amount when you look at their profits, and I believe the fact will be that by the time the prices rise, we will see increases which exceed the 2.5% vat rise*. We see it when Beer and Spirit duty rises, they put on a little extra. As for the "surprised how little it is", I think you'll be surprised how much it is. VAT is often added to things which are not subject to VAT, shops, and more to the point-suppliers, add a bit on anyway. This will hit the poorest the most, an income tax rise would've been fairer but that's not an option as the Conservatives (and don't delude yourselves that this is a coalition!) will not want to upset those with the most ie;Those who donate to the Conservatives. 2.5% was unneccessary, and will only serve to allow some saving to be done to entice us with an income tax drop two budgets before the next election.

*edit; The reason for this is that other contributing factors do include VAT. Diesel for transporting the goods, fertiliser for crops, feed for animals...there is a huge list and this will be taken into account in price rises.

[scar]

.......We see it when Beer and Spirit duty rises, they put on a little extra

Duty Tax and VAT are very different beasts. VAT is added at the very end of the retailers calculation where as Duty tax is added by the manufacturer before any other costs are taken in to consideration, hence why a Duty Rise of X amount will always translate in to a higher amount for the end consumer to maintain the retailers margins.

EG, Beer at 1pence a pint Duty increase is equivilent to rought 1.5% increase in the net purchasing cost and about 4pence a pint to the end consumer.

Manufacturers collect Duty Tax on behalf of the government, not the retailers.

Also VAT paid out by a VAT registered company is recoverable so increased VAT costs in transportation, fuel, fertilisers etc would not have any effect on the final retail price. Retailers deal in NET costs, not GROSS costs when buying.

[wijit]

Scar, your point is true, but totally invalid because these costs are added on, recoverable or not. Hikes in any tax or duty (long term as opposed to the recent reduction) lead to increased prices and anyone who thinks differently is deluded. This rise will hit everybodu, but none more than those who can least afford it.
Incidentally, you can ask any boozer if a 1p hike means only 4p rise in the cost of a pint. I think you're a bit off the mark there too.

[marky No.1]

Not that anyone on here will feel pity for the motor trade but there is no VAT on a second hand vehicle. However there is VAT on the profit margin therefore 2nd hand prices will go up ! Get in there quick!

B4 any clever arses spout up this doesn't include commercial vehicles where the VAT has been claimed