Tax rise on 4th January 2011

GRogers_2

Hi, how will the tax rise affect my salary in January? I am a single woman in her 30's who earns around £15,500 per annum and I work full time.

Can anybody please advise?

Thanks

le_loup

What tax rise on 4th January?
Do you mean VAT?
That will not affect your income.

Horseunderwater

Only thing happening on 4th Jan 2011 is VAT (value added tax) originally invented for luxury items, but now charged by UK gov't on just about anything. The rate goes up from 17.5% to 20%, so unless you buy lots of expensive stuff each month where VAT is due, then there should not be any overall change to your income. VAT on elect/gas etc will still be at 5%. Books are still Zero % but kindles/Ebooks etc are charged at the 20% rate (17.5% currently).

diable

Petrol, mobile phone bills, anything from your local DIY store, cosmetics, perfumes etc etc will go up......

le_loup

Horseunderwater wrote: »

originally invented for luxury items,

What on earth gives you that idea?
There used to be a higher rate of VAT on what were thought to be luxury items of 12.5% compared to 8% for the rest. Successive Conservative governments have managed to lump them all together and make it 20% for almost everything.

harryhound

Purchase tax was the forerunner of VAT - I seem to remember there was a time when purchase tax on new cars was 55%.
But of course the country was deeply in debt then and had a nasty balance of payments deficit.

Horseunderwater

le_loup wrote: »

What on earth gives you that idea?
There used to be a higher rate of VAT on what were thought to be luxury items of 12.5% compared to 8% for the rest. Successive Conservative governments have managed to lump them all together and make it 20% for almost everything.

VAT in the UK has been 17.5% for years with a concession rate of 5% for utility companies, (which was 8% in 1994 originally). Since 1991 in fact the (17.5%) rate has applied.
Originally introduced in 1973 at 10% then down to 8% in 1974, with a 25% higher rate for petrol that then went down to 12.5% - which in 1979 was merged into one 15% rate for all things. Later to go up to 17.5% in 1991. But yes it was the conservatives who levied it. It has not yet gone up to 20% - happens 4th Jan 2011. So there will be 3 rates 20% 5% and 0% on the 4th Jan. I may not know much about VAT, but I do know the rates.

le_loup

Horseunderwater wrote: »

originally invented for luxury items.

No it wasn't, it was on most no-food items.

Horseunderwater wrote: »

with a concession rate of 5% for utility companies, (which was 8% in 1994 originally).

No it wasn't ... it was originally zero rated.

harryhound

It is the tax that funds part of our membership of the European Union - at least the first few percent of it do and the majority of that is refunded to Farmers/ (land owners) for their zero rated production and payments per acre / (Hectare).

http://en.wikipedia.org/wiki/European_Union_Value_Added_Tax

http://en.wikipedia.org/wiki/Budget_of_the_European_Union

Can someone tell me why a rich little low cost place like Luxembourg get a nice big subsidy per head?

dawyldthing

Its the CAP (Common Agricultural Policy) that benefits most from this said membership to the EU, and i remember being taught that its the French that benefits the most and England benefits the least as we pay one of the highest amounts in and get one of the least amounts back out again

harryhound

Since the expansion of the EU to the East, the situation seems to have changed (but we are still one of the largest net contributors) see wiki link above.

Member state, in , out, gain or loss, ratio out/in, population, benefit per capita.

Austria 19 10 -8.5 0.526 8,298,923 -1024
Belgium 33 39 +6.4 1.182 10,584,534 605
Bulgaria 2.3 12 +9.7 5.218 7,679,290 1263
Cyprus 1.1 1 -0.1 0.909 778,684 -128
Czech Republic 9.2 31 +22 3.370 10,287,189 2139
Denmark 17 10 -7.2 0.588 5,444,242 -1322
Estonia 0.8 4 +3.2 5.0 1,342,409 2384
Finland 13 9 -3.7 0.692 5,276,955 -701
France 140 89 -51 0.636 63,392,140 -805
Germany 164 78 -86 0.476 82,314,906 -1045
Greece 15 40 +25 2.667 11,171,740 2238
Hungary 8.4 32 +24 3.810 10,066,158 2384
Republic of Ireland 11 12 +0.6 1.091 4,312,526 139
Italy 116 70 -46 0.603 59,131,287 -778
Latvia 1.4 6 +4.6 4.286 2,281,305 2016
Lithuania 1.7 9 +7.3 5.294 3,384,879 2157
Luxembourg 2.3 10 +7.7 4.348 476,187 16170
Malta 0.5 1 +0.5 2.0 407,810 1226
Netherlands 37 13 -24 0.351 16,357,992 -1467
Poland 22 87 +65 3.955 38,125,479 1705
Portugal 12 29 +17 2.417 10,599,095 1604
Romania 7.2 32 +25 4.444 21,565,119 1159
Slovakia 3.5 14 +11 4.00 5,393,637 2039
Slovenia 3.1 6 +2.9 1.9354 2,010,377 1443
Spain 76 78 +2.2 1.026 44,474,631 49
Sweden 20 9 -11 0.450 9,113,257 -1207
United Kingdom 103 46 -57 0.447 60,816,701 -937

Unit of measurement for the money is billions of € for the totals and € for the head count - mum dad & two kids in my household - good to know we are doing our bit for our European cousins.

http://en.wikipedia.org/wiki/File:Per_capita_benefit_from_EU_for_budget_period_2007-2013_-_vertical.png

I think Luxembourg is an anomaly because of the number of tax [STRIKE]fiddle[/STRIKE] minimisation companies registered there, making the rebates go to Luxembourg as the first step in a chain of distributing the money through the banking system?