Clean It Up
UK Floor Cleaning Forum => Carpet Cleaning Forum => Topic started by: Hilton on May 13, 2010, 09:28:55 am
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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.
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Inevitable I'm afraid.
They have to start reducing the deficit somehow. VAT is much higher than this in other EU countries.
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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
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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
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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.
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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!
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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
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I understand the cost of living in Switzerland is very very high.
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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 %
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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
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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
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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
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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
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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
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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.
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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.
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Hi
Time to move to Florida, sales tax is 6%.
Regards
Martin 8)
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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!!!!
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Have they no business sense...it will kill "the recovery" dead. >:(
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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.
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Good idea Rich.... Another idea would be to offer them jobs, and for each job they turn down they lose £10 a week from their dole until they end up with didly.... Or even have them litter picking beaches, parks and the like to justify recieving dole money...
Vote Colin Day ;D ;D ;D
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Good idea Rich.... Another idea would be to offer them jobs, and for each job they turn down they lose £10 a week from their dole until they end up with didly.... Or even have them litter picking beaches, parks and the like to justify recieving dole money...
Vote Colin Day ;D ;D ;D
community service
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Too high and people fiddle and avoid too much which has the same result as setting rates too low.
That's more likely the outcome.
There are already people across the various forums who say "Did a job for cash" (and I think we all know what that really means), so slapping the vat up even more will result in even more 'cash' jobs which will leave the the countries income from vat lower.
Sometimes they (mp's) really don't think it through.
Like many, I wasn't stupid enough to believe all the pre election nicey nicey stuff. The hard facts are for every penny they give us they strive to take back the same penny plus a bit more.
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Rich/Colin
Your both bang on the money with your last posts.
Make the lazy t^&*$ work for their benefits.
Cheers
Steve
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Your on the mark neil with your post and more and more people will be offering cash for work done,its the way most will think as we already get hammered with tax..
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If we could vote again, I'd probably switch and vote Labour back in :o Sometimes it's better the devil you know!!!!!
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Just watch and wait i think they will make all businesses go VAT reg.
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Just watch and wait i think they will make all businesses go VAT reg.
That wouldn't be such a bad thing. It doesn't make a difference to commercial customers and at least Joe public wouldn't fall over in shock when "just"a leaning company is vat Registerd :)
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It would be a bad thing.
Doesnt make a difference to businesses who use our service if they are already registered for VAT.
but to Joe Public - another 20% may mean them not getting carpets cleaned - and we are already a dirty nation by virtue only a small number of houses have carpets cleaned regularly or even at all.
I think the Federation of Small businesses would have a strong voice of disapproval because it would not just be carpet cleaners being hit - it would be all such small businesses.
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VAT is an evil tax, even your kids end up paying it.
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Yep John - one of the stipulations of allowing the UK to join the EEC in the early 1970s'.
Although in fairness - we did have 'sales tax' before then
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Yep John - one of the stipulations of allowing the UK to join the EEC in the early 1970s'.
Although in fairness - we did have 'sales tax' before then
I remember when VAT came in. We had a china shop, Purchase tax (as it then was) was between 25% and 55% (going on memory) depending on whether the item was functional or decorative and was added by the manufacturer before the retailer ever saw it. We didn't have to bother with any form of accounting for it. The first VAT rate was 10% and the reg. threshold was £5,000 p.a. so it roped in nearly everybody. They even had to run courses to show people how it worked, and it was seen as the end of life as we knew it. Over the years the VAT rate went up first of all to a weird twin-rate of 8% and 12.5%, then they scrapped that and went to 15%, then finally 17.5% and the threshold went up to its present level. It begs the question - for those cc's doing less than £1,000 a week, is it worth staying registered? De-reg. and it's like an immediate 20% price rise on domestics (if you give them an inclusive price). The only outgoings you can claim on are basically chemicals, phones, office costs and fuel, which can be carefully monitored; a lot of other overheads are not vat'ed anyway like insurance, bank charges, road tax and so on. It would also get rid of that gloomy cheque thing every three months! Would be interested in other people's sums.
Happy cleaning!
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If you can't figure out how to avoid VAT registration.....how on earth do you manage to run your business on a day to day basis ?
If you think being VAT registered is OK but turn over less than £2k per week you are bonkers !
If you reckon your customers will be happy paying 20% EXTRA TAX for your service when a similar service doesn't charge VAT you're in cloud cuckoo land.
If you missed the outgoing government's discussions about VAT increases and have missed their stealth tax rises over the past decade, what have you been doing ?
CONTROL YOUR COSTS and become more efficient in your use of time and work practices.
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Well said Robert
and to highlight what Mike Halliday has said on another post this morning......
if you think your customers would be happy to pay 20% (or even 17.5%) VAT, then why not up your prices that amount, this may take you into VAT territory, so take an extra 6 weeks holiday a year.
You not losing out on income but getting an extra 6 weeks holiday a year.
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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.
#
Ok but what is it in France Germany Belgium Italy Netherlands Austria
In addition do any of these countries tax food. porn Magazine Books about Celebs Childrens Cloths , Newspapers etc
Becauseat present these itemsare zero rated
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Without being too blatant.........you don't work to give away your earnings. Learn to RETAIN as much of your TOP LINE as possible.
How often do you go to a job which has a value of, say, £90 recorded in your diary and the customer asks for additional work to be done or a neighbour asks if you have time to clean her hallway / bedroom or whatever.
Do you really think any savvy person is going to record this bonus and volunteer to pay tax on it ? Dishonest ? What about the expenses and bonuses claimed by polticians or employees who " doctor " their expenses.
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I pay my way and declare every penny.... We've those poor unfortunates on the dole to pay for, immigrants to financially support and someone has to pay for the upkeep of MP's moats and duck houses!!!!
;D
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Yeeeeeeeeeeeeaaaaaaaaaaaaaaaaah ! That's what I meant ::)
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i declare everything through my books, earnings, tips, even money i find down the backs of the settee's, its the law.
there, its on record now ;D
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i declare everything through my books ....even money i find down the backs of the settee's, its the law.
Shrewd move Derek - making the Inland Revenue accomplices in crime :-X
regards
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VAT, nothing we can do about it............................the end.