Beat the January VAT price hikes

JasonLVC

barrie666 wrote: »

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 ?

Are you paying cash or via your own banking finance?. If so, the dealer is talking rubbish but not a lot you can do about it if they don't want to play ball.

I can pay in advance for a major property extension if I wanted to and it'll be charged with VAT at the time I hand my cash over even though my extension doesn't exist as yet....so that blows away the dealers 'theory' on that one.

If you are paying by dealer/manufacturer finance then the finance house will not release the funds to pay for the car until it exists and so in that scenario, the dealer is correct, he cannot 'sell' you a car with money that doesn't exist (as the finance will not appear until the car does!).

You could always pay a large deposit up front now and that'll be at 15% but unless you are buying a Ferrari, the VAT increase of 2.5% will only add a few hundred quid to the purchase price which in the scheme of things/bank loan over 3-4 years is small fry.

AP

barrie666 wrote: »

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 ?

If you make an advance payment for the full amount of the car before 31/12/09, then VAT can only be charged at 15% as the tax point is the earlier of either the date of payment or date of invoice (see my above post on Payment in advance for future services).

John_Pierpoint

He probably knows there will be a big price increase in January, let alone the VAT angle.
We don't make many cars in the UK anymore and Sterling is nolonger a must have currency.

Danstar_2

moneypooh wrote: »

I do find it ironic that last year the media and some members on this site said the VAT decrease was meagre and didn't have much effect, but now it's going the other way it's a price hike. Bizarre, I don't remember everyone getting excited about it reducing, but annoyed now that it's going back to normal.
I do think retailers will use it as an excuse to put their prices up as we are all expecting increases.

Surely it's not a hike up, it's getting us back to where we a year ago. I'm just glad they didn't decide to increase it beyond the 17.5% to get back the reduction.

Daily Mail for you.

hermitplod

Surely if I order goods (building materials) and request an invoice before the end of 2009 the tax point will be in 2009 and therefore the rate payable will be 15%, regardless of when I settle the account or receive the goods?

AP

hermitplod wrote: »

Surely if I order goods (building materials) and request an invoice before the end of 2009 the tax point will be in 2009 and therefore the rate payable will be 15%, regardless of when I settle the account or receive the goods?

Yes - as stated in my previous posts, the tax point is the earlier of either the date of invoice or the date of payment. So if everything happens in 2009 (both date of invoice and date of payment), you will of course be charged 15% VAT. Also, you will only be charged 15% VAT even when:

1. You pay for the goods in full in 2009 with the invoice dated 2010.
2. You get an invoice dated 2009 and pay for it in 2010 in full within 6 months.

gotneed

Just wondering how the VAT rise will effect the contracts I have for my mobile and broadband. Signed up at an agreed monthly price for a year - can it go up?

Photojonic

gotneed wrote: »

Just wondering how the VAT rise will effect the contracts I have for my mobile and broadband. Signed up at an agreed monthly price for a year - can it go up?

For your mobile, you will likely find you've been paying slightly less than the quoted £30 etc a month... I'm on a £30 a month tariff and have been paying only £29.40 ish this year. (This is Vodafone) so you can expect an increase of around £0.40 - £1.00 depending on how much you spend a month.

Broadband im not sure on...

BernardM

JasonLVC wrote: »

...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.

What are you talking about JasonLVC. Its grossly unfair and was introduced as part of the price we have to pay for being part of the EU. The tax burden is now indirect VAT rather than direct taxation. The British Taxpayer is considerably worse off than 30 years ago.

How can you say its fair if a multi-millionaire pays the same for goods or services as an unemployed person or struggling pensioner.
Tax liability should be shifted from indirect to direct taxation and those that earn the most should pay the most.

JasonLVC

BernardM wrote: »

What are you talking about JasonLVC. Its grossly unfair and was introduced as part of the price we have to pay for being part of the EU. The tax burden is now indirect vat rather than direct taxation. The British Taxpayer is considerably worse off than 30 years ago.

How can you say its fair if a multi-millionaire pays the same for goods or services as an unemployed person or struggling pensioner.
Tax liability should be shifted from indirect to direct taxation and those that earn the most should pay the most.

I think you'd need to qualify exactly how the British taxpayer is worse off than 30 years ago as a direct result of joining the EU to validate your assumptions. You are implying the decline in our economy solely to VAT, which would need some serious stats to back that up.

Direct taxation doesn't work as well as indirect tax which is why governments around the world take more via indirect taxes....and SDLT and duty (such as fuel and alcohol duty....all are indirect taxes by the way;)).

It is fair because a person has a choice to walk, take the bus, buy a car or buy a Ferrari and depending upon their choice they either pay no VAT (walking or bus), some VAT (cheap car) or a lot of VAT (expensive car). Many foodstuffs are VAT free as are childrens clothing, safety items, books and public transport so the poor folks aren't being penalised.

Taxing a few rich people 90% of their salary will mean they just leave the country, leaving the country to survive on 100 people paying 1% tax.

The PBR this week sees a rise of direct tax, as per your idea, of 1% to anyone earning over £20k (in reality more like £15k), which means direct tax rises also affect the 'poor', only here they have NO choice in avoiding paying it as it is taxed at source, whereas tax them less on tehri pay and then tax them on their consumption instead so that choice is involved more often.

VAT is difficult to avoid (unlike direct tax and off-shore salaries), is very cheap to collect (as the seller does the admin, not the government) and brings in almost double that of NI and PAYE alone.

If you want to talk about whether or not it was right for us to join the EU 30 years ago then I'm happy to join you over in the Discussion Forums, start a new thread there, but this is a thread about the VAT increase so lets keep it on topic.