How quick could a VAT increase be introduced?

smjxm09

I have a new car on order which will go up by around £500 if the projected increase in VAT happens. There is an emergency budget next month but how quick could a rise in VAT be introduced?

JasonLVC

Darling mentioned the VAT cut to 15% in his November 2008 budget and the cut was introduced on 01 December 2008 so if VAT is going to go up, it'll likely be announced on 22 June 2010 in the emergency budget and then be in effect from probably 01 July 2010.

Shops will need a few days to get their computers/labels adjusted and so I wouldn't expect the VAT to go up overnight on 22 June 2010.....but who knows as this government aren;'t sticking to the rule book on anything at the moment.

zygurat789

JasonLVC wrote: »

Darling mentioned the VAT cut to 15% in his November 2008 budget and the cut was introduced on 01 December 2008 so if VAT is going to go up, it'll likely be announced on 22 June 2010 in the emergency budget and then be in effect from probably 01 July 2010.

Shops will need a few days to get their computers/labels adjusted and so I wouldn't expect the VAT to go up overnight on 22 June 2010.....but who knows as this government aren;'t sticking to the rule book on anything at the moment.

Budgets back to tuesday at 15:30 as is the Conservative way.

Pennywise

A long time ago, VAT was increased at midnight on the day of the announcement - I can't remember if it was when it increased from 8 to 15% or 15 to 17.5%, but there wasn't any time to adjust - it just happened.

Same with fuel and tobacco duties - usually increased from midnight on the day of the announcement.

The reduction to 15% was unusual in that it was a reduction. Usually, increases don't get any notice - the govt want more money and giving notice to allow people to buy beforehand loses money for the treasury.

I can't imagine any govt would give thought to the practicalities of businesses preparing for such a change - they have no history of being that considerate!

If I were you, I'd plan for any increase being immediate, but on balance, I don't think they'll raise it this time. More likely in the 2011 Budget.

brightonman123

if i recall, vat stayed at the rate you placed order (when it went back up to 17.5%, order made when at 15% stayed at 15..)

John_Pierpoint

They might chicken out of a simple VAT increase because the latest RPI (Retail Prices Index) is already approaching an annualised 6% sticking another 1-2 % on it will look bad.

Perhaps the budget will bring in another rate angled at "luxury" items that make a big contribution to the trade deficit; thus offering a reduction in both of the "unmentionable deficits" in the last election?

BenG1

Or they'll make books, kids clothes etc no longer exempt. Though I doubt that would bring in much money.

John_Pierpoint

brightonman123 wrote: »

if i recall, vat stayed at the rate you placed order (when it went back up to 17.5%, order made when at 15% stayed at 15..)

I think you had to order and pay in advance to keep the VAT at 15% ?

Slinky

If you pay for your car on or before budget day you'll get the 17.5% rate even if it's not delivered until after the budget.

John_Pierpoint

...................but the garage might go bust; put some of it on Credit Card?

smjxm09

I have already paid £500 by credit card. Does the credit card company become responsible for the whole debt if the dealer went bust?

On the other hand I am not sure I would be happy paying the full amount up front in case the delivery was delayed by months.? Anyone got an opinion as to whether this is a good idea.?