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News Retailers to minimise impact of VAT increase

Discussion in 'Article Discussion' started by CardJoe, 5 Jan 2011.

  1. jrs77

    jrs77 Well-Known Member

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    Yeah, that's exactly the problem within europe imho.



    On another note, if anything then VAT and all other taxes should be all the same within the EU, but as no country want to give up their sovereignity all the countries within the EU will continue to fail with their economy within the next 10 years.
    The little recovery in the UK and the good recovery in germany are bought with the money of the other EU-countries actually. Germany exports some 60% of their goods into EU-countries for example.
    The northern countries of the EU are playing an economical game against the southern countries and we see where this is heading, do we?
    Portugal and Spain are the next ones we've to pay for with the money we made by destroying their economy to save ours.
     
  2. Tattysnuc

    Tattysnuc Thinking about which mod to do 1st.

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    I'm getting sick of reading about how a VAT increase effects "only the poorest."

    FOOD is excempt (except luxury items)
    CHILDRENS CLOTHES and SHOES are exempt.
    ENERGY for heating your home is excempt.

    these things are essentials for living.

    You are paying more on your phone bill, broadband, cosmetics, clothes, literature, white goods and technology.

    If people are buying lots of these items then how can they be referred to as "the poorest". Surely if they were taxing those items that were FUNDAMENTAL, then that would target the poorest, but otherwise, please leave it out.

    Petrol's gone up 3p a litre. That's £1.20 a tank on a small car. Petrol is an expensive commodity that's a limited and ever depleting resourse. Similarly money is a limited resourse that people are borrowing more and more of, and I believe it is easier to access, and they are using this to pay for items that are outdated before the debt for the item is paid for - that's just madness!

    I know no-one wants to pay more for anything, but people have to realise that in a capitalist world, everything has a cost attached. Britain as a country is no longer self sufficient and has not been for a centrury, and to deal with the growth in poulation and economic growth, it has outsourced a lot of it's "production" and therefore JOBS. While companies are outsourcing they see money savings.
    The down side is that the countries that win those outsourced jobs pick up the longer term economic benefits as more of their potential workforce become engaged in work. As soon as the financial incentives are removed, the jobs are moved on to the next subsidised nation. Look at the UK gaming industry as an example. Look at the Irish economy as another example.

    The UK's problem is that to live here costs too much. Costs have grown and grown over the last 10 years, and we're finally being made to pay for it.

    If everyone contributed then the burden would be lightened. If the cost of administering Government was reduced, then the cost to everyone would be reduced.

    There doesn't appear to be a quick fix to this.

    We've "had it good" (that's painful to say, so please don't pull me up on that) and the taxpayer has absorbed the cost of paying for a govenment that's become bloated and unwieldy in size. We've also increased the size of the NHS (which is still one of the worlds largest "employers!). Something has to give SOMEWHERE! Either that, or the pound devalues significantly on the international money market. Maybe it's time to financially tie to the States or Europe and fix exchange rates... We're too small a player in the global market now.

    The options appear to only be to cut govenement spend or increase govenment income or fiscally link with a bigger player and work with them to keep trading internal to both countries.
     
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  3. Tangster

    Tangster Butt-kicking for goodness!

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    Count yourself lucky. I went home over Christmas and bus fares for a single are £2.80. Two years ago it was £1.20.
    Similar thing with oil/gas. If the market spikes then we get a nice price rise almost instantly(well within a month or so) and "ohh, but we need to cover costs!" but when they fall back down again it's "We can't bring the prices down, we bought the oil/gas at a higher price."
     
  4. REMF

    REMF New Member

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    "I'm getting sick of reading about how a VAT increase effects "only the poorest."
    FOOD is excempt (except luxury items)
    CHILDRENS CLOTHES and SHOES are exempt.
    ENERGY for heating your home is exempt."

    Quite right.
     
  5. kenco_uk

    kenco_uk I unsuccessfully then tried again

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    Is cheesecake a luxury item?
    I thought it was a necessity?
    I might have to ration myself... cripes.
     
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  6. tristanperry

    tristanperry Active Member

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    This. Quality post :rock:
     
  7. mclean007

    mclean007 Officious Bystander

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    Seriously - that argument? VAT is a tax on consumption - the less you consume the less you pay, and (as has been mentioned) essential food items, children's clothing, etc. are zero rated and household energy (and some other products) are subject to only 5% VAT, so in what sense does this affect the poorest (whose spend on main rate taxable items should be lower) worse than the richest (whose spend is likely to be significantly higher, commensurate with their greater earnings and - generally - proportionally greater discretionary income)?

    In any event, it's not like there have been tax cuts for higher earners - in fact the effective tax rate for earnings between £100,000 and approx £113,000 is now 60% (thanks to the arbitrary removal of the personal allowance - thanks Gordon and Alistair for that tasty bit of stealth tax genius as a parting shot), and the rate for earnings over £150,000 is now 50%. Compare this to the flat 40% for earnings over approx £40k that we had a year ago, and it's clear that the wealthier are bearing a disproportionate share of the burden of repairing the country's finances. You may well argue that that is as it should be - those with the broadest shoulders bear the greatest burden, etc. - but don't trot out that tired old "it hits the poorest hardest" nonsense because it's hogwash.
     
  8. mclean007

    mclean007 Officious Bystander

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    Couldn't agree more! Though two factual points - first off, kids' clothes, basic foods etc. aren't exempt, they are zero rated. There is a subtle difference but it's worth pointing out. Technically they are subject to VAT, it's just that the rate is 0%. Sorry for that bit of pedantry - I'm a tax lawyer you see!

    Secondly, domestic energy isn't exempt or zero rated - it's subject to VAT but at the lower rate of just 5%, which hasn't changed.
     
  9. PabloFunky

    PabloFunky New Member

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    Even though food is exempt from tax, petrol/diesel isnt and the cost of the food being delivered will be more, and natrually this will be added to the price of the goods,
    so no tax, but price increase because of the tax still.

    So many things like this get overlooked and at end of day, the tax payer will still be the loser as usual.
     
  10. mclean007

    mclean007 Officious Bystander

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    Except it won't, because the delivery companies will be fully taxable and will be able to recover the VAT they pay. Same for the supermarkets and everyone else in the supply chain. So if fuel costs £1 + VAT per litre, then pre-increase it was £1.175 and now it's £1.20 inc VAT, but the delivery company recovers £0.175 (pre-increase) and £0.20 (now), so the cost to them remains the same. This is actually the subtle distinction between zero rated and exempt supplies - if food was exempt, then the companies in the supply chain wouldn't be able to recover VAT on purchases they make in order to supply the food (e.g. fuel) so the increase in VAT on fuel would impact final food prices. As food is zero rated, however, the companies in the supply chain can recover their VAT in full.

    Food prices are far more affected by currency fluctuations and supply side factors like weather affecting yield, than by tax. This is particularly true in the case of 'basic' foodstuffs - as an example, a series of worldwide failures in what crop in 2010 led to an increase in the price of wheat and flour, but it was also reported in August that this would have knock-on effects on meat prices because animal feed would become more expensive so it would cost more to rear animals (link: http://www.telegraph.co.uk/finance/...es-set-to-jump-after-wheat-crop-failures.html).

    I think they should teach basic economics like this in schools - otherwise people who don't understand the forces at play have a tendency to blame government. The government has a lot to answer for, but food prices are generally beyond its influence.
     
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  11. sharpethunder

    sharpethunder New Member

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    WELL the best way of putting it for every £100 you spend you have to £2.10 in vat
     
  12. sharpethunder

    sharpethunder New Member

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  13. frontline

    frontline Punish Your Machine

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    Surprised nobody has noticed that you also have to pay an extra 1% for Insurance Premium Tax as of 04/01/11 too (5% up to 6%). Stealth taxation Cheesecake...
     
  14. leexgx

    leexgx CPC hang out zone (i Fix pcs i do )

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    when VAT went down to 15% my thought was pointless as retailers would not pass that onto the customers as it benefited them with profit or at best it would of levelled of the cost of having to reprogram all the till systems to correct the VAT on the systems (as vat has never changed for so long a lot of system are hard coded for 17.5%) that issue is mostly for smaller shops as there turnover is smaller

    when it when back up to 17.5% prices went up from the norm prices and now 20% even more so (more then then 2.5 or 5% price hike)

    should of just left VAT at what it was they are sifting us on other stuff any way
     
  15. xaser04

    xaser04 Ba Ba Ba BANANA!

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    I am going to nit pick here...

    Childrens clothes and shoes are Zero rate NOT exempt. There is no difference to the price you pay but there is a very important distinction.

    Energy for heating your home (domestic use) incurs VAT of 5%, it is NOT exempt.

    The rest of your points (and general tone of your post) I agree with.
     
  16. Cupboard

    Cupboard I'm not a modder.

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    It is nice to read some people actually pointing out the other side of the coin for once, rather than just the usual "oh no, costs!"

    I'm a little scared that even despite all this, the amount we're borrowing each year is still going to be *huge*. It took me a long time (too long) to realise that the deficit wasn't our debt, but the amount our debt is increasing every year. I also find it quite incredible that we managed to get into this situation, while we kept being told that the people in charge were the best thing that the economy had ever had and "no more boom and bust". Ah well.
     
  17. mclean007

    mclean007 Officious Bystander

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    Already covered these points in my post above. The exempt / zero rated distinction is as you say significant, and is (briefly) explained in my other post above.
     
  18. sausages

    sausages New Member

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    Well "the poor" will still be affected by it one way or another. Just because there'll be no big increases on kids clothes etc, doesn't make much difference. To truly poor people, every quid matters, so this is all going to be a big deal to them. It already costs a lot to live here, not it will be even more.
     
  19. tristanperry

    tristanperry Active Member

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    Well it's a pitty that this country's finances are in such a mess then. Something needs to be done. Even the people who caused this mess (Labour) agree on that.

    There's no perfect solution, although the current measures hit "the rich" more than "the poor" (even though we're already towards the peak of the Laffer curve, in my opinion). Plus despite the crappy finances and various measures which Labour introduced which screwed "the poor" (10p tax rate abolishment, mountains of stealth taxes, etc etc), there are some positives coming out from the coalition which will benefit "the poor" (increasing the personal tax allowance, a rise in the minimum wage which is higher than the average private sector pay rise during the recession years, etc). And also part of the point of sorting out the debt is that it'll help to bring confidence in the markets back.

    In the medium to long term, these measures will help. Sure they'll hurt in the short term, but 13 years of crappy economic management can't be sorted out overnight.

    At least the coalition is happy to do the unpopular even if the positive effects probably won't be felt until the next parliament; Labour's policy almost seemed to be to do anything which is popular in the short term, even if it screwed things for the future.

    Sadly, this tactic got votes.

    That doesn't mean it's a good tactic for the economy/country's finances, though.

    *Shrugs*


    Anywhoo, I'd be interested to hear an alternative set of overall measures to sort out the mess of the country's finances? :)



    Edit: Ignore post; is a bit off-topic plus online political debates are seldom useful :hehe: :thumb:
     
    Last edited: 6 Jan 2011
  20. javaman

    javaman May irritate Eyes

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    You could always shop in Germany. Like I could shop in Ireland, if it wasn't in a worse state than here. Least fuel is still cheaper there so not all bad! (Family in Donegal means im there about once a week)


    I do! Mainland transport is considerably worse. I can't comment on train fare cost here since I haven't used one in 10 years so I have nothing to compare to but since we're currently screwing up on upgrading them (buying trains that can't run on the lines only to be forced to spend on upgrading the lines to run them) they're prices are stupidly high to start with! We saved a fortune on fuel this year by lighting the open fire. My uncle digs his own turf and we got some off him for helping him dig it. We also burned alot of crap since the bin men couldn't collect it. Problem is big corporate monoplies. We only have one electric provider in Northern Ireland which doesn't help prices.
     
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