Scary Stuff.... Oil currently at $106.95

Wheezy_2

Graham_Devon wrote: »

Prices at the pumps for diesel are gonna be £1.40 a litre before we know it.

More importantly, this is going to put a real strain on the economy, and sadly, families.

But when a Labour politician proposes not to apply the VAT increase to fuel, you critisize it. Okay.

Graham_Devon wrote: »

Yep that's how he described it in an interview. It was when questioned on how this is possible that he started confusing everyone, including himself.

Didn't see the interview, but he simply advocates not applying the VAT rise on fuel. It's simple, nothing to get confused about.

http://www.independent.co.uk/news/uk/politics/ed-balls-calls-for-petrol-vat-abolition-2227049.html

Ed Balls has called on the Government to reverse soaring fuel prices by abolishing the recent VAT rise in petrol.

http://www.dailymail.co.uk/news/article-1361064/Ed-Balls-calls-Government-abolish-VAT-rise-petrol.html

Ed Balls has called on the Government to reverse soaring fuel prices by abolishing the recent VAT rise in petrol.

JasonLVC

Wheezy wrote: »

Didn't see the interview, but he simply advocates not applying the VAT rise on fuel. It's simple, nothing to get confused about.

http://www.independent.co.uk/news/uk/politics/ed-balls-calls-for-petrol-vat-abolition-2227049.html


http://www.dailymail.co.uk/news/article-1361064/Ed-Balls-calls-Government-abolish-VAT-rise-petrol.html

He can advocate all he likes but no government has the power to apply a different rate of VAT on petrol/diesel, which is what he was suggesting should happen. So he is technically wrong - a bit worrying if he will be Chancellor one day (or, he knows what he said is wrong but it gets him the headline coverage he so desired).

He might as well have said something equally impossible and ridiculous like the UK will not be in debt on March 15th 2012 or do a Cameron and promise to be tough on bankers (knowing full well there's little he can do, but it makes him look good).

Wheezy_2

JasonLVC wrote: »

He can advocate all he likes but no government has the power to apply a different rate of VAT on petrol/diesel, which is what he was suggesting should happen.

If it's the case that we can not set VAT rates (within EU limits) then Balls is talking rubbish of course.
But from this table it seems VAT rates on fuel are anywhere between 15 and 25% in the EU
http://ec.europa.eu/taxation_customs/resources/documents/taxation/vat/how_vat_works/rates/vat_rates_en.pdf
(page 16)

Also: http://business.timesonline.co.uk/tol/business/economics/pbr/article5213582.ece

However, under European Union (EU) regulations, Vat cannot be lowered below 15%.

JasonLVC

The table is a good one Wheezy, but it needs some explaining.

Page 3 shows the different VAT rates in each country (reduced, standard and some have a 'super' reduced rate). The reduced/standard are standard across all EU states, the 'super' reduced was a legacy from when that country joined the EU. So the EU has 2 main types of VAT rate.

We can see that Cyprus has a reduced rate of 5% and a standard rate of 15%, whereas the UK is 5% and 20% respectively.

Page 16 shows the VAT rate for petrol/diesel, for Cyprus it is 15% and for the UK it is 20%, this is becuase it is set in EU law that petrol/diesel can only be sold at the standard rate of VAT. That Cyrpus charge 15% is simply becuase that is Cyprus' standard rate of VAT. EU law specifies exactly what falls under the reduced rate of VAT and petrol isn't on the list.

So the UK can change the VAT % we apply to standard rated goods (down to 15%) but we cannot change petrol from being a standard rated good to a reduced rated good - unless it was a legacy agreement upon joining.....which is why the UK and Malta have zero rate for foodstuffs whereas the rest of Europe has reduced rate VAT on food, same for childrens clothing, VAT charged everywhere else, not in the UK, it was the deal we struck at the time of joining.

The lowest the standard rate can go down to is 15%, you are correct, but the lowest VAT can go to is 5% (the reduced rate of VAT). When the UK had to charge VAT on domestic fuel, it was originally 8%, when Brown became chancellor he reduced the reduced rate to 5% which is as low as he could get it.

Graham_Devon

Wheezy wrote: »

But when a Labour politician proposes not to apply the VAT increase to fuel, you critisize it. Okay.

Because it's nigh on impossible.

That's why its critisized.

Wheezy_2

JasonLVC wrote: »

The table is a good one Wheezy, but it needs some explaining.

Page 3 shows the different VAT rates in each country (reduced, standard and some have a 'super' reduced rate). The reduced/standard are standard across all EU states, the 'super' reduced was a legacy from when that country joined the EU. So the EU has 2 main types of VAT rate.

We can see that Cyprus has a reduced rate of 5% and a standard rate of 15%, whereas the UK is 5% and 20% respectively.

Page 16 shows the VAT rate for petrol/diesel, for Cyprus it is 15% and for the UK it is 20%, this is becuase it is set in EU law that petrol/diesel can only be sold at the standard rate of VAT. That Cyrpus charge 15% is simply becuase that is Cyprus' standard rate of VAT. EU law specifies exactly what falls under the reduced rate of VAT and petrol isn't on the list.

So the UK can change the VAT % we apply to standard rated goods (down to 15%) but we cannot change petrol from being a standard rated good to a reduced rated good - unless it was a legacy agreement upon joining.....which is why the UK and Malta have zero rate for foodstuffs whereas the rest of Europe has reduced rate VAT on food, same for childrens clothing, VAT charged everywhere else, not in the UK, it was the deal we struck at the time of joining.

The lowest the standard rate can go down to is 15%, you are correct, but the lowest VAT can go to is 5% (the reduced rate of VAT). When the UK had to charge VAT on domestic fuel, it was originally 8%, when Brown became chancellor he reduced the reduced rate to 5% which is as low as he could get it.

Thanks for explaining, JasonLVC, didn't know that.

Graham_Devon

Oil currently $117 a barrel.

Also seems that action has now started, with Quintin Wilson on the news talking about freezing the next duty rise (feel this will happen). Appears there could be a group about to start action on the fuel prices too.

Airlines are having their profits hit, while food retailers are warning of looming increases in prices.

Graham_Devon

Aha...

The reason Ed Balls went with VAT instead of reducing duty, was the labour also had the increased duty based into their sums. So couldn't really suggest the tories should do differently, when labour would have done the same.

So take it thats why he went with the VAT angle.

Masomnia

Graham_Devon wrote: »

Aha...

The reason Ed Balls went with VAT instead of reducing duty, was the labour also had the increased duty based into their sums. So couldn't really suggest the tories should do differently, when labour would have done the same.

So take it thats why he went with the VAT angle.

They put them in in the first place yes, and the Coalition just decided not to cancel them.

Labour would probably have put up VAT too, but we'll never know for sure

matbe

Graham_Devon wrote: »

Oil currently $117 a barrel.

Also seems that action has now started, with Quintin Wilson on the news talking about freezing the next duty rise (feel this will happen). Appears there could be a group about to start action on the fuel prices too.

Airlines are having their profits hit, while food retailers are warning of looming increases in prices.

I was led to believe that airlines bought their fuel six? months in advance or hedged the price?

If so they can't be seeing a fall in profits yet surely.

Typical big business profiteering.