% VAT cut?

RayWolfe

Y're a funny lot. If the government was going to tax you a further 2.5%, you'd be jumping up and down like scalded kittens.

bainy

A cut of 2.5% will make very little difference as it'll be pennies instead we need pounds if we are to reignite the economy.Sadly I think it will make no difference at all.We are in a slump partly due to a world crisis but mostly due to an inept chancellor and now an inept prime minister.

ragingbass

As has been mentioned earlier, it's hardly going to be the difference between buying something or not is it?!?! I also think the retailers are more inclined to pocket the difference. That's not necessarily a bad thing if it keeps them in business and keeps employing people mind! I'm sure Woolworths and their employees could do with that extra cashflow right now!!

I'm no economy expert, but it does seem the only real way to get people out and spending and driving the economy, is to make them feel that they can live above their means. Which is obviously why we're in the state we're in!

Sorry, going to go into a bit of a rant here.....

I just hope that, after all this, there's a bit more sense in the world. But I'm probably being overlly idealistic there!! For years I've seen strange business decisions that are driven by share price, rather than any kind of real business sense! "Profits and Growth for next year needs to be x%, and operations costs will be reduced by y%", so you'll do much more with less people and resources. "We'll spend 5 times as much money on a contractor instead of a full time employee so it doesn't reflect on this bottom line and we can show share holders how well we're doing".

I'm a simple bloke, and I'd like companies to get back to just providing a product or service at a cost, and then selling it on for a bit more. Is that too much to ask? I think so, lol!!

The best thing I think the government can do is make sure businesses stay in business and people stay in their houses. If that means the banks make less profits for the next decade, then so be it. But, I guess we'll see today what's going happen eh....

IFLY

swiss69 wrote: »

This cut will just have NO impact at all. A Saving of £2 odd on every £100 spent...Why would anyone go out and spend more money because of this? Its just ridiculous. MP's just haven't got a clue.

Let's be clear hear. There is another motive on this. The government want a feel go factor about all this. swiss69 is right - it will make no difference to every day spending.

I bet the overall saving for the average family will be about £ 20-30 assuming the retailers change their it systems and reflect the reduction rather than pocketing the extra. A ticketed item of 9.99 should then read £ 9.77 with VAT @ 15%.

Most of our food bills are exempt or zero rated. Fuel is rated @ 5% will they change that?!!

The only imapct it will have is when we make capital expenditure.

Cars
House Extensions
House Purchases (albeit very minor on Solicitors fees)

WHo wants to spend money there at the momment!!!

The Government (Mark my words) will be put VAT back up in about a year but not to 17.5% but to more like 19.6 or even 20%. This will bring us more in line with Europe. I believe Europe has been asking for a vat increase for years.

Sorry for the rant but would love to know if anyones else has a less cynical view!!

moneypooh

As most businesses quote ex-VAT to each other, the only businesses that could pocket more without changing things are the ones selling to end users. My work will buy 2.5% cheaper (gross) but also sell on 2.5% cheaper unless the basic unit prices are increased.
So if anyone will make money out of this it'll be direct selling retailers and most suppliers won't have any changes except all the hassle of changing paperwork.

Kez100

The Government have to look at the big picture.

If they cut income tax people might spend BUT they might save it. This is not a time to be using borrowing to increase peoples savings!

They could give more money to the breadline families who would have most propensity to spend but again they may use it to repay credit cards or, even if it works, is it not kicking the teeth of those of us who have been careful in our spending and work or pensioners?

So, the advantage of VAT is that it might encourage spending if they say in a year the VAT rate will go up to say 25% then the saving of 2.5% looks psycologiocally much bigger. Also the money not passed on for all the good reasons described will live in businesses coffers and help keep them afloat and hopefully also help maintain employment levels to some extent. In addition it may not be much but we will all be a bit better off with those few pennies saved on fuel, part of our supermarket shop and perhaps christmas presents.

Kez100

Renfro wrote: »

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:

I have been wondering about flat raters. That wasn't around when we had the last change - in 1991 (ish) .

actiontxt

When times are tuff I think we should look to only support companies that pay VAT and pass on the reduction! Name and Shame companies that don’t and in particular companies that have moved away from the UK but still expect the UK citizens to buy from them, a number of companies operate out of places like the Channel Islands are doing just that.

We the UK taxpayers have just bailed out the banks we are how looking to give our country a kick start by reducing tax and at sometime in the future we will have to pay more Tax, so it seems sensible to me that we should start to support the UK companies that are helping us and our economy not the ones that don’t!

WE NEED A SURPPORT BRITAIN CAMPAIN its times like this that we need to start looking after our own!

Robert_Tycelyn

I placed an order for an item in September (price quoted was including VAT at 17.5%) and paid a deposit.
The item is due for delivery in January 2009.
Assuming that VAT is going to reduce to 15% before then will I benefit from the reduced VAT or will I have to pay the 17.5% because this was the price shown when I ordered the item?

Pennywise

actiontxt wrote: »

When times are tuff I think we should look to only support companies that pay VAT and pass on the reduction! Name and Shame companies that don’t and in particular companies that have moved away from the UK but still expect the UK citizens to buy from them, a number of companies operate out of places like the Channel Islands are doing just that.

We the UK taxpayers have just bailed out the banks we are how looking to give our country a kick start by reducing tax and at sometime in the future we will have to pay more Tax, so it seems sensible to me that we should start to support the UK companies that are helping us and our economy not the ones that don’t!

WE NEED A SURPPORT BRITAIN CAMPAIN its times like this that we need to start looking after our own!

Nice idea, but if it costs us more to support the UK, we just won't do it. Now if the UK govt reduced UK taxes, it would create a level playing field and allow UK firms to compete on equal terms against overseas firms. If only the Govt could tear itself away from its ideologies of punishing the rich and rewarding the poor, it would allow itself to celebrate success instead of punishing it. We should be reducing taxes to encourage Ebay and Google to set up business in the UK - at the moment, UK is losing out on tax revenues because companies like these pay less tax by being based in Ireland and Switzerland.