CharlesW

The governor of the Bank of England isn't convinced.

Referring to the temporary reduction in the main rate of VAT from 17.5pc to 15pc, which will take effect for 13 months from Monday, he said: "One of the impacts of the temporary cut in VAT is likely to be that during the second half of next year there will be a lot of advertisements saying buy now before VAT goes back up again in January 2010. So precisely when this expenditure switching will occur is difficult to judge."

ronjeramy

iTrader: (1)

Well I truely can't understand the lodgic in adding 2p on a litre and then take 2.5% off it, they would have been better off saying fuel was exempt from the VAT increase? I mean, it's a 1/4 of a pence reduction!? Do **** and booze have VAT?

dpb

http://www.private-eye.co.uk/picture...l/1223_big.jpg


im pretty sure hes thinking revolvers in this pic..

OllyK

Yes they do, and it's been done so that when VAT comes back up again in 13 months, the government get an increase in revenue without actually having to declare a tax rise at that point.

EddScott

Whilst I agree this measure appears a complete waste of time I'm not sure about this issue with people not spending.

Saturday I had to queue to park in Tesco. Monday afternoon Toys R Us had a fair few people in it although only one couple had the "Look at how much sh1te we have in our trolley" competition. Tesco was packed considering it was a week day.

I also spoke to a chap I know who has 10 properties and just wandered how he feels about the current situation and he told me that he was working in an M&S recently that took £1m in one day.

I said people are not going to spend this xmas and he felt that they were.

There was much talk about getting banks to start lending to business and individuals but is this not what got us into this mess (amongst other things)

It has to stop. People, banks, business have to take the hit whether they can pay or not. We appear to want to give the alchoholics the keys to the drinks cabinet - it won't work. It has to stop somewhere.

Seine

You do know there are people who can afford to spend some cash and take on a loan without defaulting don't you

EddScott

Which are exactly the people who are not the problem so don't roll your eyes at me my friend.

Seine

Apology accepted, just that your original post insinuated that credit should stop.

Wurzel

iTrader: (1)

I beg to differ I am over the moon by the rate cut, it means my H&S exhaust is going to be cheaper, along with the crap value of the pound my Euros are going to go alot further this Christmas

Well done Labour there is at least 2 people happy that you have fcuked up the UK's economy

EddScott

Are you accepting or offering?

If your offering, accepted. If your accepting, it wasn't offered.

Reducing interest rates and pumping money into banks to encourage them to offer lower interest rates on loans and mortgages to do what - get people into even more debt.

An economy built on debt is destined to fail.

Diesel

Hmmmmm??? I used to pay them 10.5% of what the company earnt (inc VAT) now after the 2.5% vat reduction I need to pay them 9.5%.
That looks like 1.5% MORE than the reduction in VAT for everyone else????? However doing a sum - on £117.50 income inc VAT I paid them £12.375. On same income but now lower VAT I have to pay them £10.97 (£100 +15% VAT). That is £1.40 per £100 income more in my pocket. I thought thay hated small businesses or am I getting my sums wrong?

Actually I wonder if they are continuing with the Family Business tax 'reform' in order to further kick small businesses in the bollox? [They dont think a wife can work in a family business and that it is all a shady tax dodge] Budget: Darling shelves family business tax :: Contractor UK

D

+Doc+

I don't understand why they didn't reduce income tax with the high earning brackets receiving less reductions.
If they are wanting to stimulate the economy then money in the pocket is better than false reductions in prices.

hoskib

iTrader: (1)

how very dare you!

*points to door* get out. go on, and take your fancy ideas with you.



just been out and bought a cut price bucket and a bag of sand, i'm going to stick my head in it until this all blows over

Robertio

iTrader: (1)

Tell me about it working 70+ hours a week is bad enough without the powers that be adding another stack of hours onto it. Switching back is going to be a nightmare as well, with them making it the 1st Jan there will be a distinct lack of festive holidays next year.

SunnySideUp

Haven't read all the posts, but I guess the general feeling is "Whats the point of £2:50 off in £100?"

I thought the same, until I listened to a wise old man on TV.

He said, think about everything you buy in a month which attracts VAT and then add up what is saved, he suggested that the average family would be at least £40 a month better off ..... not much, but it makes the reduction appear worthwhile.

boomer

Sort of related, in an upside down way...

VAT rise 'dropped just days ago'

...sounds a little fishy to me

mb

hoskib

iTrader: (1)

yeah, i've just had a think about what i buy in a month. most of it is either zero VAT or it's had duty slapped on it to wipe out any benefit. £40?? i'll be lucky to save 4.

this is all to get more money in their coffers, very little to do with getting it back in your pockets.

very few prices in the shops will drop, how many people will compare their shopping bill to receipt a month ago? i would, but i'm a nerd

dynamix

iTrader: (3)

All that assumes that retailers will actually reduce pricing to reflect it.

£19.95 item now going to be priced at £19.52 ? i dont think so

Most retailers that I know are absorbing the 2.5% internally.

Companies that could claim back VAT on petrol will now no longer be able to claim so much back ... hmm another kick in the teeth for business.

Tinkering at the edges IMO and will do nothing apart from enforced IT expenditure on businesses. Plus it has essentially killed all retail trade this week/weekend with shoppers expecting price cuts next week - I suspect they will be disappointed.

OllyK

It's about actually giving away as little as possible and yet giving people the false hope that will have more disposable income.

CLSII

Hell I remember when Value added tax was 8%.....it was only applied to a few things but surprisingly it seemed such an easy way of raising loads of money it just kept on going.

You can still see some really old houses that bricked up their windows when window tax was introduced a few hundred years ago

Tax was introduced a couple of hundred years ago as a short term measure but seemed such a wizard wheeze it just kept on going.

I was trying to explain tax to my 10 year old the other day and he just didn't get it.

You get paid and you get taxed, then you buy things you need to live and you get taxed, you buy a car and you get taxed on that , then get taxed to use it and get taxed on the fuel you put in it....you get the picture.

At the end of our conversation I didn't really get it either

I presume at some point a labour government would prefer to take everything we earn off us and just give us enough back to survive.

They do know best though...I think they are brilliant.

George Orwell had a couple of things to say about this style of government apparently

jods

VAT down to 15% ! What a complete waste of time. All that has done for me is present me with more work to do to reprogram invoicing / accounting systems to apply the new rate, contact the accountants to confirm if the rate is applied on work done before the rate came into being or on any invoices issued from the 1st Dec. I'll not spend any more than I already do - Chateau Jordan is not hard up but we are battening down the hatches for the tough times ahead.

A wnakers piece of smoke and mirrors. Brown, Darling and Labour have done an absolutely superb job of ******* up the UK, AGAIN!!!

LABOUR = TOTAL WASTE OF TIME (Unless you are a Parasite, in which case the "Aresholes of Middle England and Wealthy ******* will subsidise your burger chomping, *** smoking, benefit cheating, kiddie fiddling habits)

Fuuuuuuuuuuuuuuuuuuuuuuck Offffffffffffffffffffffffffffffff