Beat the January VAT price hikes

moneypooh

attar_uk wrote: »

OK, so this isn’t going to be popular, but it would be good to hear people’s opinions...

VAT was introduced in 1973 at a time before the mass production of goods in places like India and China. Clothes weren’t looked upon as much as fashion statements, and kids clothes cost a lot more (as a percentage of a family’s income) than they do now. The same goes for books... We weren’t swamped by the glut of cheap coffee table glossy’s and tabloid tat celebrity nonsense that we have filling the shops now.

So I say it’s time to add VAT on kid’s clothes and books!

The economy is in a state and I think it's time we stopped giving special financial favours to the parade of kid’s fashion and Katy Price biogs.

I appreciate that many families are finding it hard to make ends meet and that kids clothing can cost a lot of their weekly/monthly budget. This would also be a good time for clothing suppliers to look at the obscene profit margins added to clothing and drop their prices too.

Let’s not forget that there is no VAT payable on second hand items...

TBH my children having been paying (well not them me!) VAT on their clothes and shoes for many years despite being 12 and 15. Very few shops cater for their size and style; and my DD has been shopping in shops with adult clothes for a few years now. Mothercare and Adams etc..really only cater for the 10yrs and below.
New look & Next do ranges to 15yrs, but my son wouldn't be seen in t-shirts with tractors/Ben 10/dinosaurs on them!! (can't see why tho')
Junior shoes usually only go to size 5.5 or 6, so then they end up with adult ranges and that means VAT.

tenuissent

JasonLVC Thanks for your comprehensive reply. I have not yet quite absorbed it but there is a lot there to think about. She was legally in this country for 10 years, but her student visas expired, so she spent the next almost 2 years well outside the EU in her home country while we worked on preparing her visa application. The invoices are addressed to her, but I pay them. I do indeed not wish to annoy this solicitor, who has worked hard and in a friendly, supportive way to achieve her return. My only (almost) quibble is his constant assurance that there will be no VAT, followed by this sudden reversal. Coincidentally he has just emailed me to say "I am in discussion with my accounts people re this bill - I am hopeful that they will agree VAT is not payable" which is wonderful news. Yes, I have been attempting to make paragraphs in the standard way you mention; so there must be a glitch in my computer system, as they always revert to a block of text. As just now.

JasonLVC

Sounds promising then....

It is quite confusing as you can see from my previous post and it is hard for a solicitor to actually KNOW FOR SURE whether someone is or isn't resident in the UK for VAT purposes (just becuase they live in the UK they could still be classed as being a foreigner and vice versa!!!!!)

Glad you picked up on the suggestion re not annoying the solicitor. No-one likes an unexpected bill, especially if it is a lot, but some battles are worth fighting and others are not...depending upon whether you want to use them again in the future;)

If she was on a student visa then she did not have permision to legally reside here permanently and so I'd have thought this means she is treated as living outside the EU and thus VAT free legal fees. I hasten to add for others here, a student visa means you are legally here, just not the legal right to remain here - so she is a legal immigrant but not allowed to live here forever without permission being granted. Whilst she is here on a visa she is deemed to be 'foreign' for VAT purposes. She is not an 'illegal' immigrant in the angry newspaper context.

As for the paragraphs thing, I recall having a similar trouble a while back. i had some weird Active X loaded into Explorer that made this happen. I disabled the Active X thingy and the problem went away.

No worries, hope things turn out alright for you and yours.

John_Pierpoint

Now was it in the days when VAT was 8% or was it when VAT was 10% - I cannot remember; but I do remember arranging to be invoiced for the bedroom 3 months before it was fitted,

Put at least some of the payment on your credit card, just in case the supplier goes bust in the mean time, then you can go after the credit company.

Confuzzled

moneypooh wrote: »

Junior shoes usually only go to size 5.5 or 6, so then they end up with adult ranges and that means VAT.

you can find jr shoes in those sizes? my 8 year old daughter wears size 4 (she's quite tall!) and i find it very difficult to find kids shoes for her, i have to shop in the womans section now, real nightmare to get flat shoes! guess i'm having to pay vat on her things just because she's big for her age:eek:

keys27

I have a new caravan ordered and will be paying the extra.

Why - because the Dealer wants payment by 16 Dec with a possible delivery date of Mid January.

If they go bust, then I lose the lot !! Its not unusual for the vultures to pounce during holiday periods, scrape the useful assets, and the new phoenix company trades again with no recompense to buyers.
I would have paid by several credit cards but dealer will not accept them only debit cards etc.

AP

RBG wrote: »

I find some of the points you have raised are a little misleading compared to the Governments rulings on the vat change. Particularly the 3rd and 4th points about when goods are received and deposits.

I work for a company that provides services rather than products and we have been clearly told that the vat rate is applicable at the time the service is provided. If a customer wishes to pay in advance during 2009 then the additional vat amount must be invoiced in 2010. Likewise, if a customer pays a deposit during 2010 for a service they receive in 2010, the deposit is an amount taken off the final invoice (raised in 2010 at time of service) and therefore the rate of 17.5% vat applies to the whole amount.

Basically, you will only save on the vat increase if you purchase goods during 2009 before the change. Paying in advance for services you will receive in 2010 will not bring any benefit as the final amount will have to be invoiced at 17.5%.

This is not exactly true. According to the following HMRC web page:-

http://www.hmrc.gov.uk/vat/managing/special-situations/instalments.htm

"
Advance payments and deposits





An advance payment, or deposit, is a proportion of the total selling price that a customer pays before you supply them with goods or services. If you ask for an advance payment, the tax point is whichever of the following happens first:

• the date you issue a VAT invoice for the advance payment
• the date you receive the advance payment "

This means that if you make a (huge) advance payment on account before 31/12/09 for future services in 2010, the supplier can only charge you the VAT rate on the date that the payment is made, i.e. 15%, even though the invoice date is on or after 01/01/10, until the credit balance on your account runs out.

If you can remember back in 1994 when VAT was first imposed on domestic gas and electricity, all power companies did actually encourage their customers to make advance payment on account so that they could benefit from the 0% VAT until their credit balance ran out. I did it at the time and had avoided paying VAT on my gas and electricity bills for over a year.

Examples of things that you can make a huge payment in advance this time are: phone bills (both landline and mobile), subscription TV services, broadband subscription (except AOL), etc.

e.g. I have a pay monthly mobile phone contract with O2. If I go on to their website now and make an advance payment of say £300 into my account to make it go into credit, I'm sure O2 will carry on charging me 15% VAT in 2010 until this credit balance runs out.

Please check with your accountant or tax adviser if you do not believe this is the case.

barrie666

I ordered a new car in November and was told that I would have to pay VAT at 17.5% because it will not be built and delivered until early next year. I was surprised that the dealer could not invoice me in December, so that I could pay VAT at the current rate. Does anyone know how I could avoid paying at the higher rate ?

BernardM

VAT is an unfair system of taxation. It should be abolished.

JasonLVC

BernardM wrote: »

VAT is an unfair system of taxation. It should be abolished.

...and replaced with what?.

VAT is the most fairest tax system ever invented....it is so good many countries have VAT including India, Saudi Arabia, South AFrican nations....even Arnie in California is pressuring the senate to allow him top introduce it in LA.