[Hilton]

Prepare your selves Vat is going to rise to 20% that will be an added direct cost to each and every one of us, if not already reg. for Vat might be a good idea to think about it now.

Will you pass the increase on to your customers ? Something to think about.

[Steve Barnett (Carpet Care Plus)]

Inevitable I'm afraid.

They have to start reducing the deficit somehow. VAT is much higher than this in other EU countries.

[JandS]

Is that right Steve??
What's the dearest?
Didn't even know other countries charged it.
But then again never really thought of it abroad.

John

[Joe H]

but tax on fuel is much higher in the UK

for vat in the EU look at the right hand column

http://en.wikipedia.org/wiki/Tax_rates_of_Europe

[Steve Barnett (Carpet Care Plus)]

John

Denmark    25%
Greece       21% soon to rise to 23%
Norway      25%
Poland       22%
Sweden     25%
Ireland      21 %
Hungary    25%

Should have said other countries, rather than specified EU countries.

[jasonl]

I remember an economics professor teaching us that tax rates are very carefully calculated....

Too low and not enough revenue will be generated.

Too high and people fiddle and avoid too much which has the same result as setting rates too low.


Abit like prices for carpet cleaning!

[JandS]

Wonder if the 25% countries offset this by having lower income tax
on people who earn that countries average wage.
Also a higher threshold before tax is due.
Switzerland looks good!!!!!!!!!!

John

[Joe H]

I understand the cost of living in Switzerland is very very high.

[richy27]

will hurt those who have to charge vat on th domestic side. realistically apart from large purchases not goingto hurt the under threshhold cc s much not on day to day running. may even bring he independants more work as the fanchise companys become more expensive.

new zealand the rate is 12.5 %

[Jason Ryan]

Tax threashold due to rise to £10k but vat will take away the benifit if it goes to 20%.

Does this mean ptrol will go even higher?

Be interesting to see where we are a year from now.

J

[richy27]

Tax threashold due to rise to £10k but vat will take away the benifit if it goes to 20%.

Does this mean ptrol will go even higher?

Be interesting to see where we are a year from now.

J

how will the raise in the tax threashold be cancelled out by a raise of2.5 % in vat. dont get it surely it would depend on your relative turnover and ougoings p/a

[Joe H]

I think we all know you dont get anything for nothing.
IF the tax threshold gets raised to £10k then thats extra few thou tax free.
It has to be paid for.
VAT increase is just one way to start clawing it back - and yes fuel will be dearer as well (unless they tweak the taxes - but you dont get owt for nowt, and so it goes round).
Keep your extra few thou you got tax free in your pocket if you can.
More likely you will spend it so you start paying the higher taxes.

There is a massive deficit in the country, whoever got in they would have to do something drastic.

Whoever lost the election may well turn out to be winners at the end of the day - cause those who HAVE to turn the screw will be so unpopular they wont get in again

[Jason Ryan]

What i meant by cancelled out by vat raise, was not as businesses but in general as everything will go up in price due to vat rise and so we will spend more and so spend the extra we get via the higher tax threashold (if i make sense?).

Also things that are zero rated VAT like kids clothes, may have some vat added to them, well that was one idea some party had floating around.

J

[Doctor Carpet (Ret'd)]

Rise in personal allowance to £10k will save approx £600 in income tax. (20% on the approx £3000 extra level of personal allowance).

You would have to be spending more than (approx) £24000 on goods which attract VAT to be worse off as a result of an increase in VAT. (2.5% of £24k is £600).

But....

The increaase in personal allowance is being talked about as being phased in over a couple of years, whereas I bet VAT goes up straight away. Fiscal drag! (Bah, humbug).

Looking from an optimistic place, with higher personal allowances it may just encourage some who are not working to take on a job as lower taxes reduce the disincentive of losing out on benefits.

The theory of balancing increased personal allowances against increased VAT is to reflect that VAT is a regressive tax which hits everybody (more or less) equally as it is payable on the same goods at the same rate irrespective of whether you are high income or low income.

Roger

[robert meldrum]

I remember " purchase tax " which was an added tax before the adoption of VAT and seem to remember it at around 36% on some goods.  I think it was the retailer who added it and it certainly was not added to second hand goods.
The outgoing government was responsible for more tax increases  and creations than any government in history. One of the worst being the tax added to domestic flights.
Try booking an internal flight in the UK..............might start at £22 but with the Labour taxes it would end up at around £120 due to their appalling rip off taxes.
We could have gone for a week to Tenerife for less than the return fair to Southampton recently and will drive down for a third time shortly due to the prohibitive cost of flights for four.

[Hilton]

It does not hit everyone more or less evenly, it hits the less well off more than any other group,

If you are on a below average income any tax increase (and there have been many by the last government) will hit you hardest, the spread is not even, VAT increase will rise on fuel, electricity and gas as well as every day goods.Thats why under a 'Labour' governement and even in the worst recession in history the rich have got richer, the gap is wider than ever. This VAT rise will have no impact on them.

And from 2011 we can also look forward to a 1% increase in income tax.

As we are VAT registered we will pass this increase on when it happens probably in the third quarter this year, as will other business's so all costs will rise, best be prepared beforehand.

Childrens clothes and food will not have VAT applied but as mentioned transportation of these goods will , so both will also rise in price.

Any benefit from a 10k threshold will more than be wiped out by other associated costs and inflation, 12 k would have been better and probably seen a big rush for employment from the work shy.

The VAT increase will slow growth and have little or no impact on the country's deficit. Cutting public spending will.

The big question for carpet cleaners is, if you charged VAT on your work would it have an impact on your sales, I suspect for many it would especially as it will be upper most in peoples thoughts in the coming months and most would not appreciate having to pay it for cleaning.

If you target the top end , I doubt it will have any impact at all.

[The Great One]

Hi

Time to move to Florida, sales tax is 6%.

Regards

Martin

[Colin Day]

What I can't get my head around is that they dropped VAT to 15% to boost the economy.... : And now they're upping it to 20%

I fear things are about to get pretty bad.... even worse than before, I so hope I'm wrong!!!!

[Paul Heath]

Have they no business sense...it will kill "the recovery" dead.

[richy27]

i say change the way benefits are payed out- food and housing vouchers instead of the wasters spending our taxes on drugs and booze. trouble is its a case of cant work wont work in most cases. and have more kids caus we get more benefits.