MSE News: Government defends VAT rise

edited 30 November -1 at 1:00AM in Cutting Tax
30 replies 3.5K views
MSE_GuyMSE_Guy MSE Staff
1.7K Posts
I've been Money Tipped! Newshound! Chutzpah Haggler
edited 30 November -1 at 1:00AM in Cutting Tax
This is the discussion thread for the following MSE News Story:

"Chancellor George Osborne insists today's rise is a "tough but necessary step" towards economic recovery ..."
Read the full story:
Government defends VAT rise




OfficialStamp.gif
«13

Replies

  • Butterfly_BrainButterfly_Brain Forumite
    8.9K Posts
    Part of the Furniture 1,000 Posts I've been Money Tipped! Post of the Month
    ✭✭✭✭
    To some it may seem like only a few pence on some items but if you are on a low income all those pennies add up to pounds.

    Some of the affected items are:

    Soap-powder, softener, cleaning products,toilet rolls, personal care items including shampoo,toothpaste, sanitary pads, medicines etc

    Chocolate, chocolate biscuits, sweets etc

    Beer, wine, spirits, petrol, diesel, tobacco products - these are all double wammy because they all have duty payable too.

    If you have to use any service such as a plumber, electrician, garage work, double glazing, building work, paints, wallpaper, tools etc

    All white goods, , furniture, carpets, knitting wool, material, clothes, shoes, tvs, cameras, phones, light bulbs, dvds, cds, computers etc

    Car insurance, house insurance, pensions etc are vatable too

    So with wages frozen and more job losses on the horizon this will just make things a lot harder and will drive us into a double dip recession.
    Blessed are the cracked for they are the ones that let in the light
    C.R.A.P R.O.L.L.Z. Member #35 Butterfly Brain + OH - Foraging Fixers
    Not Buying it 2015!
  • CLAPTONCLAPTON Forumite
    41.9K Posts
    10,000 Posts Combo Breaker
    ✭✭✭✭✭
    it's a tax rise so of course it makes us poorer
    whether it drives us into another recession remains to be seen
  • ArthurianArthurian Forumite
    738 Posts
    Part of the Furniture 500 Posts
    ✭✭
    According to BBC news this morning, Poundland said it will have to absorb the increase because of its name. So I suppose some of Poundland's goods will become smaller packages, and some will become more of a bargain from today.
  • This is quite simply a money raising exercise. It is not a solution to help the population of this country, merely a way of taking more money out of people's pockets to pay for the mistakes of others who remain unaccountable/untouchable.
  • savemoneysavemoney Forumite
    18.1K Posts
    Part of the Furniture 10,000 Posts
    ✭✭✭✭✭
    They may reduce the contents of some of its goods they have the clout in retail to do this
    Arthurian wrote: »
    According to BBC news this morning, Poundland said it will have to absorb the increase because of its name. So I suppose some of Poundland's goods will become smaller packages, and some will become more of a bargain from today.
  • DegenerateDegenerate Forumite
    2.2K Posts
    This is quite simply a money raising exercise.

    Congratulations, you grasped the concept of taxation.
  • callum9999callum9999 Forumite
    4.2K Posts
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    ✭✭✭✭
    This is quite simply a money raising exercise. It is not a solution to help the population of this country, merely a way of taking more money out of people's pockets to pay for the mistakes of others who remain unaccountable/untouchable.

    I think you'll find it's not just the "bankers" (the people who you appear to be moaning about - not that most of them were ever at fault anyway) who caused this, it's the millions of people who took out too much debt and then defaulted on it. Blame evil banks as much as you want, but ultimately people have free will, and they chose to take out more than they could handle. You can't just call them idiots and forgive them while simultaneously launching a hate campaign against banks (not saying you inparticular are doing this - but the average person does).
  • edited 4 January 2011 at 3:15PM
    dori2odori2o Forumite
    8.2K Posts
    Part of the Furniture 1,000 Posts
    ✭✭✭✭
    edited 4 January 2011 at 3:15PM
    It is the most unfair of all the taxes to raise as it affects the poor harder than the rich.

    One other thing to cosider is this.

    Food, other than chocolate, dinkks etc is mainly VAT free. However, the increase in VAT will nonetheless lead to an increase in these same items.

    Lets not forget that food has to be delivered to shops/supermarkets, and it is the rising costs of transporting the food, due to the increased VAT on petrol, vehicle maintenance etc that will force the shops to increase the price of their non VATable items regardless.
    callum9999 wrote: »
    I think you'll find it's not just the "bankers" (the people who you appear to be moaning about - not that most of them were ever at fault anyway) who caused this, it's the millions of people who took out too much debt and then defaulted on it. Blame evil banks as much as you want, but ultimately people have free will, and they chose to take out more than they could handle. You can't just call them idiots and forgive them while simultaneously launching a hate campaign against banks (not saying you inparticular are doing this - but the average person does).
    By the same token it was the bankers who were using OUR money to fund their risky investments. Also, whilst I agree that people should be paying off what they have borrowed, this probably accounted for less than 1% of the money that was lost by the banks.

    One final point to note. Nobody at the banks seemed to worry about first of all lending these people the money, no matter what their financial histories or ability to pay back the money. The banks were happy to lend it despite the risks.
    [SIZE=-1]To equate judgement and wisdom with occupation is at best . . . insulting.
    [/SIZE]
  • JasonLVCJasonLVC Forumite
    16.8K Posts
    Part of the Furniture Combo Breaker
    ✭✭✭✭✭
    Arthurian wrote: »
    According to BBC news this morning, Poundland said it will have to absorb the increase because of its name. So I suppose some of Poundland's goods will become smaller packages, and some will become more of a bargain from today.

    Poundland have previously stated they are working with suppliers to reduce package size to maintain the price point, thus instead of seeing 6 packets of walkers crisps you might be getting 5 instead, etc.

    Indeed, Poundland have been doing this for ages already, they sell Wrigley's Gum in 3 packs whereas the supermarkets sell them in 4's only.
    Anger ruins joy, it steals the goodness of my mind. Forces me to say terrible things. Overcoming anger brings peace of mind, a mind without regret. If I overcome anger, I will be delightful and loved by everyone.
  • JasonLVCJasonLVC Forumite
    16.8K Posts
    Part of the Furniture Combo Breaker
    ✭✭✭✭✭
    dori2o wrote: »
    Lets not forget that food has to be delivered to shops/supermarkets, and it is the rising costs of transporting the food, due to the increased VAT on petrol, vehicle maintenance etc that will force the shops to increase the price of their non VATable items regardless.

    VAT on fuel is not a cost to a supplier, manufacturer or distributer becuase these will all be VAT registered businesses and they will reclaim any VAT they are charged.

    VAT is a tax on the end consumer (you and I), everyone else in the chain are VAT neutral (unless the business is not VAT registered, whereupon it will be an extra cost).

    By the same token it was the bankers who were using OUR money to fund their risky investments. Also, whilst I agree that people should be paying off what they have borrowed, this probably accounted for less than 1% of the money that was lost by the banks.

    Those 'risky' investments you refer to were originally mortgages and loans given to people who had no intention or ability to repay them. So whilst the bankers took the risk, the people who took out those loans and mortgages enjoyed fancy housing and holidays. When the banks ran out of cash due to loans not being repaid, governments had to step in to keep them afloat.

    One final point to note. Nobody at the banks seemed to worry about first of all lending these people the money, no matter what their financial histories or ability to pay back the money. The banks were happy to lend it despite the risks.

    Your last point is indeed valid, but risk is what banks do. If they didn't lend money to anyone, nobody would buy anything. Remember, there were also dodgy loans to companies which went under oweing millions, again, banks not lending to businesses = no businesses. They got the balance wrong for sure, but to blame them 100% is unfair.

    Did anyone notice any price drops when VAT was reduced to 15%?

    For the first few months yes, thereafter, retail stores quietly pushed their prices back up to maintain ingrained price points, thus a pair of Nike Trainers may have gone down from £39.99 to £37.99 but thereafter they were back at £39.99 with the excuse that inflation was rising and production costs had gone up.

    Did Argos/Screwfix reduce the price of the item pritned in their catalogues to reflect the reduction/increase in VAT or did they still charge the book price even though the book was pritned when VAT was 17.5% but covered two seasons where VAt was 15%?

    Did we notice NCP/council car parking charges go down during the VAT reduction? Did taxi's charge less for their services, did plumbers stop charging £100 an hour and reduce it to £95 per hour? I do not think so.

    Point is there are many factors which can be used to excuse a price rise. Petrol didn't go down during the 15% rate becuase oil was 'at an all time high', during the car scrappage scheme nearly every manufacturer increased their car selling prices and blamed 'raw material cost increases'.
    Anger ruins joy, it steals the goodness of my mind. Forces me to say terrible things. Overcoming anger brings peace of mind, a mind without regret. If I overcome anger, I will be delightful and loved by everyone.
This discussion has been closed.
Latest News and Guides