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VAT to be cut to 15%?


Dave
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http://news.bbc.co.uk/1/hi/uk_politics/7744273.stm

VAT 'to be cut in rescue package'

 

Gordon Brown has refused to comment on reports the government will cut VAT by 2.5% as part of an emergency package aimed at kick-starting the economy.

 

But the PM said "substantial" measures would be in the pre-Budget report on Monday to pump money into the economy.

 

Will this be passed on to the consumer or just allow businesses to make more?

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http://news.bbc.co.uk/1/hi/uk_politics/7744273.stm

VAT 'to be cut in rescue package'

 

Gordon Brown has refused to comment on reports the government will cut VAT by 2.5% as part of an emergency package aimed at kick-starting the economy.

 

But the PM said "substantial" measures would be in the pre-Budget report on Monday to pump money into the economy.

 

Will this be passed on to the consumer or just allow businesses to make more?

 

Either that or the costs of making the changes in business will ultimately be passed on to the customer, which seeing as it's a short term measure makes it pretty pointless.

 

Anyone who thinks their local shop will go round and re-price everything is having a laugh though.

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Either that or the costs of making the changes in business will ultimately be passed on to the customer, which seeing as it's a short term measure makes it pretty pointless.

 

Anyone who thinks their local shop will go round and re-price everything is having a laugh though.

 

They don't have to re-price everything, they could say 2.5% off listed prices, I think.

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Either that or the costs of making the changes in business will ultimately be passed on to the customer, which seeing as it's a short term measure makes it pretty pointless.

 

Anyone who thinks their local shop will go round and re-price everything is having a laugh though.

 

They don't have to re-price everything, they could say 2.5% off listed prices, I think.

 

It doesn't work out as 2.5% of the listed price, the real change is less than that.  VAT accounts for about 14.9% of what you spend in a pound.  I'd be surprised if smaller retailers change their prices, which ultimately means its playing further into the hands of the Tesco type businesses, allowing them to reduce their price to their customer.

 

Consumers will hardly feel the benefit at all sadly.

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hmm, duno might help a bit, but as you get you're vat back i duno

i get my V A T back ?

 

Nope.

didn't think so...don't know what adam is thinking of.

 

Businesses can claim vat back on certain stuff, not sure if it is everything you buy (including stuff from your suppliers or what though).

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hmm, duno might help a bit, but as you get you're vat back i duno

i get my V A T back ?

 

Nope.

didn't think so...don't know what adam is thinking of.

 

Businesses can claim vat back on certain stuff, not sure if it is everything you buy (including stuff from your suppliers or what though).

 

 

if a business is vat, registered, it claims back the vat on all its purchases.

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hmm, duno might help a bit, but as you get you're vat back i duno

i get my V A T back ?

 

Nope.

didn't think so...don't know what adam is thinking of.

 

Businesses can claim vat back on certain stuff, not sure if it is everything you buy (including stuff from your suppliers or what though).

 

 

if a business is vat, registered, it claims back the vat on all its purchases.

 

Yea thats what I meant, though I have no idea how much money they would get back.

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Guest Howaythetoon

They should just let the recession take its course, ride the fucker out and prepare for when it ends rather than trying hopelessly to arrest it and miraculously make it go away :lol:

 

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They should just let the recession take its course, ride the fucker out and prepare for when it ends rather than trying hopelessly to arrest it and miraculously make it go away :lol:

 

 

Don't be so naive.

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That Darling chap is an absolute genius though, isn't he?! By announcing tax increases today which will become effective from two years' time he's single-handedly given the so-called super-rich and higher band salary earners plenty of time to plan their finances appropriately, move funds abroad into safe tax-free havens, etc.

 

Genius. :lol: 

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That Darling chap is an absolute genius though, isn't he?! By announcing tax increases today which will become effective from two years' time he's single-handedly given the so-called super-rich and higher band salary earners plenty of time to plan their finances appropriately, move funds abroad into safe tax-free havens, etc.

 

Genius. :lol: 

 

:lol:

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its about time it was reduced, it was raised from 15% in 1991 as a temporary measure, to cover the loss in revenues to local authorities, caused by mass non payment of the community charge.(poll tax)

 

how come they got away with keeping it at 17.5 for all those years, and charging us huge council taxes?

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hmm, duno might help a bit, but as you get you're vat back i duno

i get my V A T back ?

 

Nope.

didn't think so...don't know what adam is thinking of.

 

Businesses can claim vat back on certain stuff, not sure if it is everything you buy (including stuff from your suppliers or what though).

 

 

if a business is vat, registered, it claims back the vat on all its purchases.

 

Yea thats what I meant, though I have no idea how much money they would get back.

 

The business is entitled to claim all of it's VAT back on purchases the relate to business supplies (assuming it's taxable supplies are not exempt).

For the actual business, all they are reclaiming is exactly what they paid in VAT, it should be (in theory) the end use customer (us) that benefits from the reduction in rate, but as has been said this relies on businesses lowering their advertised prices.

 

I feel the majority will do this (I know the banks have failed to pass on the interest rate cut), but the supermarkets lead all in the retail world. They have already reduced their petrol prices forcing others to compete, and they will do the same with all their retail goods.

 

I'm not sure we will see the full benefit (and the benefit is not huge in the first place), but I do predict a small decrease in the prices of most goods (not forgetting that food is a zero rated VAT supply anyway, so it won't affect your grocery bill), but should help buying all those Christmas presents.

 

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Guest MrShens

A joke idea by a joke Government.

 

Businesses are going to absorb this VAT holiday and not pass it on to the customer.  They should have lowered income tax by 1p at least on the basic rate.

 

Morons.

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This week oil hit it's lowest price for over 3 years, petrol hasn't.  If the greedy bastard oil companies dropped the price of petrol and diesel then we'll pay less for almost everything.  I go through a full tank of petrol every week, it's a 52 litre tank.

 

I think I've read that I'll be £11 a week better off by 2010 because of the budget, big deal.  I've got more than that off the oil companies since they started reducing fuel.  In 2005 petrol was between 75p and 85p a litre, within the last month or so I've been paying 119p per litre and its still 95p per litre today.

 

Oil companies make record profits and we're told that we'll end up having to pay higher taxes in years to come for this VAT reduction, just keep VAT at 17.5% and force the oil companies to reduce prices in line with the price of a barrel of oil.

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