Tax Cuts!

[Mancie]

Originally Posted by shillelagh

Just one question .......... Are the pound shops going to be 98p shops now?

Well I reckon that 17.5% of £1 is 17/p 5 shillings and sixpence..so 15% of £1 should be 15/p ..that means the price should go down by 2 shillings and 6 pence for every pound.

[jaysay]

Originally Posted by Mancie

Well I reckon that 17.5% of £1 is 17/p 5 shillings and sixpence..so 15% of £1 should be 15/p ..that means the price should go down by 2 shillings and 6 pence for every pound.

Don't know about Special Brew Mancie, but for heavens sake keep taking the tablets Mancie for PM

[andrewb]

A document signed by treasury minister Stephen Timms says VAT will rise to 18.5% in 2011.

The government are now saying that they rejected the idea, despite it being in the final draft.

[Neil]

Originally Posted by shillelagh

Just one question .......... Are the pound shops going to be 98p shops now?

No, what it means is that we will still pay the same for many things but shops will make more profit.

[claytonender]

[quote=Neil;654049]I wonder if this VAT cut will actually cost shops money?

They will have to change the VAT rate that has sat still for 34 years.
I wonder if it will be easy for all the online sites to change their VAT levels. I know it should be easy but you never know.
quote]

You are incorrect in saying that the VAT rate has sat still for 34 years - there have been several changes in the rate since it was first introduced in 1973. The last major change to standard rate VAT was in 1991, when it was increased from 15% to 17.5% in an attempt to reform the ill thought out 'Poll Tax' when millions of people were suddenly expected to pay exorbitant bills, compared to the old Rateable Value system.

(I copied this from a report produced by an Australian University)

VAT was originally introduced in the UK in 1973 at a standard rate of 10%.
In 1974, this was cut to 8%, but VAT was levied at an additional "luxury
rate" on a range of items at a rate of 25% from 1975. The wide disparity
between the two rates and the range of anomalies in the relative taxation of
items falling in different categories led to the 25% rate being reduced to
12.5% in 1976. However, the administration of the two rates remained
difficult and further revenue was required to permit reductions in the rates of
income tax. In 1979, therefore, the two positive rates of VAT were amalgamated at 15%. Much later, following the poll tax disaster, a substantial slice of local government taxation was also replaced by a further increase in the rate of VAT to 17.5% in 1991.

The VAT base has also been extended since 1973. An early change was that
the original concession for food and drink did not seem to be quite so
appropriate for confectionery, ice cream, soft drinks and potato crisps, and
they were duly subject to VAT from 1974. Other anomalies between goods
and services subject to VAT and those not taxed continued to cause problems
and some further extensions have occurred since 1973. For example,
imported services became taxable from 1978 and a further range of items
from 1989.

One such issue that was quite noticeable was that originally meals that were
eaten on the suppliers’ premises were subject to VAT but "take-away" meals
were not, including the British staple of fish and chips. The result was a
significant shift in restaurant meals to "take-away" service and VAT was duly
extended in 1984 to hot food consumed off the premises. After a range of
entertaining but unsuccessful attempts to avoid the new provisions, such as
free hot fish and chips to go with the VAT-free (cold) salt and vinegar, this
change was generally accepted by taxpayers.

[claytonender]

Originally Posted by shillelagh

Just one question .......... Are the pound shops going to be 98p shops now?

If VAT is being levied at 17.50% in pound shops the nett price is 85p + VAT of 15p, which gives a selling price of £1.00. From Monday, when VAT is 15% - if they pass the VAT reduction on they should be charging a nett price of 85p + VAT of of 13p, which gives a selling price of 98p. But I suspect that they will increase there nett price to 87p, which with VAT of 13p would give a selling price of £1.00.

I know 2p is not a great increase in their profit margin.

[Royboy39]

I was always of the understanding that VAT was set by the member countries and the Gross takings paid to the EEC coffers.
Rebates were to be applied for from the central EEC fund depending on GDP and requirements of member countries.
The infrastructure of the UK was considered to be sound and most of the money was, and still is being claimed to build roads etc., for the developing countries, Spain being one of them. The roads in Spain are far superior to the roads in the UK.
Malta was given money from the fund to build roads...hey presto..that vanished.
I am anti european and maybe, only maybe the current crisis will bring with it a few home truth's about our ecomony and the way that that the EEC is funded and what will be the outcome.?

[claytonender]

Originally Posted by Royboy39

I was always of the understanding that VAT was set by the member countries and the Gross takings paid to the EEC coffers.
Rebates were to be applied for from the central EEC fund depending on GDP and requirements of member countries.
The infrastructure of the UK was considered to be sound and most of the money was, and still is being claimed to build roads etc., for the developing countries, Spain being one of them. The roads in Spain are far superior to the roads in the UK.
Malta was given money from the fund to build roads...hey presto..that vanished.
I am anti european and maybe, only maybe the current crisis will bring with it a few home truth's about our ecomony and the way that that the EEC is funded and what will be the outcome.?

If you are anti European how came you are living in Spain - which the last time I visited was a 'foreign' country. Do you neighbours and the other residents of La Villajoysa know that you are so Zenophobic?

[Royboy39]

Originally Posted by claytonender

If you are anti European how came you are living in Spain - which the last time I visited was a 'foreign' country. Do you neighbours and the other residents of La Villajoysa know that you are so Zenophobic?

I live amongst my Spanish neighbours quite comfortably and enjoy their company. We discuss quite freely the for's and against the EEC whilst having a smoke, which we both enjoy.
I like Spain for what it is, I like the people, I like the the sun, I like the price of the tobacco and the price of the alcohol.
The resident's of La Villajoyosa don't give a toss for the EEC and neither do I.

[cashman]

Originally Posted by Royboy39

I live amongst my Spanish neighbours quite comfortably and enjoy their company. We discuss quite freely the for's and against the EEC whilst having a smoke, which we both enjoy.
I like Spain for what it is, I like the people, I like the the sun, I like the price of the tobacco and the price of the alcohol.
The resident's of La Villajoyosa don't give a toss for the EEC and neither do I.

gotta agree there, all my mates when i lived there were interested in how, Malaga were doing, not remotely interested in the EEC, even though i have a different view to membership than roy.

[Neil]

Originally Posted by claytonender

If VAT is being levied at 17.50% in pound shops the nett price is 85p + VAT of 15p, which gives a selling price of £1.00. From Monday, when VAT is 15% - if they pass the VAT reduction on they should be charging a nett price of 85p + VAT of of 13p, which gives a selling price of 98p. But I suspect that they will increase there nett price to 87p, which with VAT of 13p would give a selling price of £1.00.

I know 2p is not a great increase in their profit margin.

It is a 2.4% profit increase for the shop thanks to the governments attempt to reduce the purchasers cost.

I agree I was wrong with the 34 year bit. I must have only half read the info I got it from.

[Wynonie Harris]

What's the point of it anyway? According to the Governor of the Bank of England the effects of the reduction won't be felt until the second half of next year. By that time, according to Alastair Darling, we'll be climbing out of the recession anyway...of course, that's if you believe Alastair Darling.

[jaysay]

Originally Posted by Wynonie Harris

What's the point of it anyway? According to the Governor of the Bank of England the effects of the reduction won't be felt until the second half of next year. By that time, according to Alastair Darling, we'll be climbing out of the recession anyway...of course, that's if you believe Alastair Darling.

When he finally leaves politics they say he is line for the job as editor of Billy's Weekly Liar Tony Blair is already executive editor and John Prescott the errand boy

[accyman]

if the shops act like the banks are doing we wont benefit from a cut in v.a.t anyway

the govenment gives these breaks to the banks and retailers but wether they pass the savings on to us is another thing all together

cant see this cut in v.a.t altering my life anytime soon or indeed actualy be noticed ever

fuel and british gas will take any penny we save and more when their next bout of greed is due anyway

[jaysay]

The Problem raised by this VAT rise is that a lot of small to medium businesses are being saddled with huge cost in making these reductions, at a time they can ill afford it, and aware of the fact that in April 2010 they will have to go through the whole processes again when the rate is returned to its present level of seventeen and a half percent