% VAT cut?

Pennywise

The consumer definitely won't see a benefit for small value items. Do you really think that vending machines are going to charge 98p for a coke instead of £1, or that a shop is going to bother changing the price of a kit kat from 40p to 39p. It just isn't going to happen. Even on bigger items, like a new car, it only knocks say £300 off and when you're spending £10k or more, is it really going to make you buy a car? Business will probably keep the difference themselves and so it will help keep businesses afloat - that's the practical effect and that's fine as it is smaller businesses that account for a disproportionately high percentage of UK employment - help the business keep going and reduce the number of redundancies - that makes sense. Now why couldn't they reduce the rate of employers' NIC which would be much simpler and have the same effect?

mikecmr

what do people want though? consumers saving money on items already discounted or business's making a bit more to pay their staff thus securing jobs, i see this as a tax reduction for business's only me being part of a small company will be glad to see this but me being a comsumer can see that i wont see any difference

iltisman

We must remember if the cut is 2.5% it is temporary so in a year they will put it back up to.... 20%?

LittleVoice

Who else remembers VAT at 25% on "luxury" items?

TheDufster

ITV News at Ten GOT IT WRONG tonight! So annoying.

They said that a toaster for sale currently at £150 would be priced at £146.25 after VAT was reduced to 15%.

The net price before VAT is £127.66 so the new price would be £146.81

I can see that they have simply reduced the price by 2.5% which is incorrect.

For goodness sake, this is the national news on one of our major television stations! Where did these people go to school!??!?!?!

marksoton

TheDufster wrote: »

ITV News at Ten GOT IT WRONG tonight! So annoying.

They said that a toaster for sale currently at £150 would be priced at £146.25 after VAT was reduced to 15%.

The net price before VAT is £127.66 so the new price would be £146.81

I can see that they have simply reduced the price by 2.5% which is incorrect.

For goodness sake, this is the national news on one of our major television stations! Where did these people go to school!??!?!?!

Hate to say it but probably the same place as the muppets who make monetary and fiscal policy in this country !!!

Paddy2eyes

How is having less tax revenue going to help the government get us out of the mess the country is currently in?

gazza975526570

because more people unemployed = less tax revenue

Renfro

If VAT is reduced to 15% in the PBR, what happens with regards to those small businesses that pay flat rate VAT?

I currently pay 10% VAT and I get to pocket the difference, presumably my share would decline while the rate paid to HMRC stays the same, or (in my dreams - lol) would I end up paying a reduced 7.5% to HMRC and keep the existing 7.5% for myself?

:think:

Mister_E_4

iltisman wrote: »

We must remember if the cut is 2.5% it is temporary so in a year they will put it back up to.... 20%?

My thoughts exactly!