Clean It Up
UK Floor Cleaning Forum => Carpet Cleaning Forum => Topic started by: Bob Robertson on June 22, 2010, 06:09:13 pm
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Chancellor George Osborne increased VAT from 17.5% to 20%. Will this mostly effect the bigger Franchises and VAT registered carpet cleaners on there pricing structure?
Bob
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The dust will settle............as always.
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At last a budget for the givers and not the takers!
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hi there
a few years ago, when VAT was put on energy bills, people were prepaying to save the 5%, therefore there might be a possibility to prepare for some items, ie mobile phones, etc to make the 2.5% saving, keep an eye on it.
alternatively
what you could do is offer your regular clients, or contract clients, invoice them in december 2010, get them to pay in 2010, and then they get there work done at 2010 rates.
you then hold the money in a deposit account, earn a very little bit of interest, and carry out the work to the agreed schedule.
regards
martin
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I would have started it from 1st July 2010. As for public sector wage cap dose that include their bonuses the list is endless ;)
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Will this mostly effect the bigger Franchises and VAT registered carpet cleaners on there pricing structure?
So if you were spending £100 on carpet cleaning it will now cost £102.50
Basically £2.50 extra on top of every £100 spent, hardly likely to break the bank is it?
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Will this mostly effect the bigger Franchises and VAT registered carpet cleaners on there pricing structure?
So if you were spending £100 on carpet cleaning it will now cost £102.50
Basically £2.50 extra on top of every £100 spent, hardly likely to break the bank is it?
either your very drunk Neil :-\ or ive got sun stroke 20% of £100 is £20, I think what you mean is rather than it costing J public £117.50 it will cost them £2.50 more (£120)
Dont get me started on vat, as I think it is one big farce ::)
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Will this mostly effect the bigger Franchises and VAT registered carpet cleaners on there pricing structure?
So if you were spending £100 on carpet cleaning it will now cost £102.50
Basically £2.50 extra on top of every £100 spent, hardly likely to break the bank is it?
VAT makes it difficult to be competetive on Domestic work. The extra 2.5% might not seem like a lot but it will put people off, even if due to VAT's profile being raised to the forefront of peoples minds.
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I thought that Westy, but I know where he's coming from...
Thing is, when the last lot of muppets dropped VAT to 15%, everybody said "Big Deal!"..... Works the same the other way round for me!!!!
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Westy, I'm already vat registered so with effect Jan 2011 my customers will in effect be paying me an extra £2.50 for every £100 there were already paying me.
The hundred pounds mentioned already included vat, perhaps I should have said whereas it was £100 net meaning it cost the customer £117.50 now it will cost £120
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Neil
The guy charging £100 no vat will be more appealing than the £100 + vat (£120) It might not be a bank breaker to you but it could be to the custy.
Bob
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I think you will find when we have become accustomed to it they will take it to 22.5%
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Westy, I'm already vat registered so with effect Jan 2011 my customers will in effect be paying me an extra £2.50 for every £100 there were already paying me.
The hundred pounds mentioned already included vat, perhaps I should have said whereas it was £100 net meaning it cost the customer £117.50 now it will cost £120
Yea, its another £2.50 more for every £100 spent, like I said its one big farce, I cant really see how anyone can agree this 2.5% increase in tax is a good thing and a meaningless small amount, it wont do yours or any other business selling to non vat registered customers any favours at all.
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strikes me as odd the increase in vat is not effective sooner, why wait until Jan? Ok it will give everyone time to get use to it. Maybe they hope things will be better and they can look like good guys when they don't implement it. Anyway it will re-focus my mind to thinking of Prowlers and truck mounts, 2.5% of a few thousand is worth saving.
Simon
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strikes me as odd the increase in vat is not effective sooner, why wait until Jan? Ok it will give everyone time to get use to it. Maybe they hope things will be better and they can look like good guys when they don't implement it. Anyway it will re-focus my mind to thinking of Prowlers and truck mounts, 2.5% of a few thousand is worth saving.
Simon
Saving... what? if your vat registered it wont make any difference as you will claim it back ??? if your not vat reg it will cost you 2.5% more :) your not going to save anything mate ::)
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Its swings and roundabouts really,
vat reg get all vat back on purchases,
non reg get it back offsetting it as a cost against the business.
Just been thinking, he didnt put fuel up in price,
however the vat will kick it up a bit next Jan
Fuel at moment (diesel) is £1.02 + 18p vat/ litre total £1.20 ( average price)
vat increase 1.02 + 20 % = £1.22 1/2 p
making an 80 litre tankfull £2 dearer. >:(
Andrew
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Vat is obscene as it hits everyone, even kids. It was brought in by Ted Heath as a luxury tax, didn't stay that way for long. Doubt it will ever go down again.
Now I may be thick but I think theres a rabbit off here. The uk economy was doing very nicely, most people I know have had the best ten years of their lives financially, a couple of them are now paper millionaires.
Then greedy mortgage brokers in the US knacked it all.
The last Labour government then had to bail the banking system out to the tune of 850 Billion pounds to prevent it collapsing. We have a deficit now of 150 billion.
Personally I think thats bloody marvellous considering what they had to spend.
And don't forget most of that money is going to be paid back by the banks, more than enough to clear the deficit. This is depending on the economy recovering and the banks becoming more stable. I think this is now more unlikely as the 25% budget cuts to the public sector kick in. A lot of you will have a lot of public sector workers as customers so they are going to be a lot less likely to be spending at the minute until things are more clearer.
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strikes me as odd the increase in vat is not effective sooner, why wait until Jan? Ok it will give everyone time to get use to it. Maybe they hope things will be better and they can look like good guys when they don't implement it. Anyway it will re-focus my mind to thinking of Prowlers and truck mounts, 2.5% of a few thousand is worth saving.
Simon
Saving... what? if your vat registered it wont make any difference as you will claim it back ??? if your not vat reg it will cost you 2.5% more :) your not going to save anything mate ::)
If I spend £6000 now whilst vat is 17.5% it will cost me £7050
If I spend £6000 in Jan vat will be 20% it will cost me £7200
Not vat registered just saved £150. Better in my pocket than anyone else's ;D
Unless I missed a wider point?
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strikes me as odd the increase in vat is not effective sooner, why wait until Jan?
Simon
Oh I understand what you meant now Simon.. Why post the above then ??? I cant for the life of me understand why anyone would want it to go up.
Regards,
Paul
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Its swings and roundabouts really,
vat reg get all vat back on purchases,
non reg get it back offsetting it as a cost against the business.
Just been thinking, he didnt put fuel up in price,
however the vat will kick it up a bit next Jan
Fuel at moment (diesel) is £1.02 + 18p vat/ litre total £1.20 ( average price)
vat increase 1.02 + 20 % = £1.22 1/2 p
making an 80 litre tankfull £2 dearer. >:(
Andrew
Don't forget the 1p rise in October is still on.
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Morning Guys I think it will effect private work as its quite simple for the average home owner to work out they pay £100 or £120 for the same job if the company/guy is vat registered.Basically just add on fifth to the price which is much easier than the seventeen and a half percent.I am sure it will play a big part in future decision making when you are approaching the Entry level income(£70k or thereabouts i believe)as to whether you expand /take someone on or just stick at that level because the vat just isnt worth the hassle.I suppose it will depend on what mix/private/commercial you have.Regards Alan(swindon) (well away from that particular decision i might add)
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VAT was not introduced s a luxury tax, it simply replaced purchase tax which was widely different on many goods. Making a tax " uniform " makes a lot easier to handle by HM tax collectors.
The UK economy APPEARED on the surface to be doing very nicely for the past decade but the reality is far too many of the us were living in credit and taking on more credit than we could afford to repay.
People have been foolishly buying homes and goods on credit which was in reality beyond their means to repay. Sure, the building societies and banks were making it easy to get the loans but nobody was holding a gun at peoples head insising they get deeply into debt.
Greed and vanity is the major cause of the recession compounded by the naivety of the British public to think it's OK to buy more and more imported goods at the cost of British industry.
I'm referring to high volume products here, eg, food, clothing, etc, which are being sourced from abroad to a greater extent every day.
VAT is I agree an obscenity but so is POOR MANAGEMENT and WASTE which is blatant in the way tax income is spent by both LOCAL and NATIONAL GOVERNMENT.
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strikes me as odd the increase in vat is not effective sooner, why wait until Jan?
Simon
Oh I understand what you meant now Simon.. Why post the above then ??? I cant for the life of me understand why anyone would want it to go up.
Regards,
Paul
Gotcha, not made myself clear. I wasn't in favour with regards my comment, just wondering why the rise has been postponed until January next year. In the 'drive' for cuts and to raise revenue, whilst I would like it to be avoided as it affects every area of my business costs, it would make sense for the chancellor to raise vat now. I remarked there maybe a motive to suspend the rise in 2011 again if the economy has recovered so as I said the government would look like the good guys. I'm a cynic me.
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For what it's worth, I think it is the right thing to do. The rich will pay more because they spend more and the poor will pay less because they spend less, but everyone pays something, and I think that is important.
Simon
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Put simply Simon (no pun intended ;D) the poor have less disposable income, so any raise in any way impacts on them more, they have been hit with not only VAT increasing but if they are on benefits that will be cut as well and if you are entitled to tax credits that gets hit.
The accumalative effect of this on the less well off will put a halt on their spending , if public service jobs are to go as well then more people will be chasing fewer jobs in the private sector ( I am sure you could take on a few) this in turn slows growth and we need growth to get out of this mess we are in. One very big vicious circle.
But we have to start somewhere, I can forsee a lot of the low end Carpet Cleaners going to the wall.
The better off will barely notice it.
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The vat increase dont forget is on a lot more products than carpet cleaning which means less disposeable income
Steve
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Simon Arena
"I remarked there maybe a motive to suspend the rise in 2011 again if the economy has recovered so as I said the government would look like the good guys. I'm a cynic me."
I think the recovery is going to take longer then Jan 2011.
The new government has it down to a 5 year plan - such that uk should be well on the way to recovery just before the next election so they can tell the voters how well they done.
Reducing tax credits is a good thing. Why does anyone on £50k a year need tax credits?
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Hi Guys
The rise to 20% pretty much brings us into line with other EU countries.
I am for it rather than 101 stealth taxes as practicised by Gordon Brown, remember one of his first in removing tax relief on dividends will probably mean my pension is two thirds of what it would have been.
Without getting too political I am a believer in tackling things early and it will be another challenge to us small businessmen but that's life!
Cheers
Doug
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Unfortunately poiticians, like social workers and other public service " profesionals " only operate under " crisis management " principals and repeat the same " we will learn from this " with regularity.
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Vat is obscene as it hits everyone, even kids. It was brought in by Ted Heath as a luxury tax, didn't stay that way for long. Doubt it will ever go down again.
.........have a deficit now of 150 billion.
Personally I think thats bloody marvellous considering what they had to spend.
And don't forget most of that money is going to be paid back by the banks, more than enough to clear the deficit. This is depending on the economy recovering and the banks becoming more stable. I think this is now more unlikely as the 25% budget cuts to the public sector kick in.
The standardisation of VAT will help with business across Europe from the point of view of trying for a level playing field, but that is not an issue for most of us. The £150 billion deficit is the kicker and it all about timing. We do not want to copy the Greeks.
Too many spending cuts and tax increases will risk a deeper recession, to slow a change will alter the UK's international credit rating, and the implications of that are myriad and genarally bad.
As smaller business, we will need to be innovative and work through this fun time until the next one arrives.
PS - can nyone lend me £50 ;D
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The public deficit measures how much more the government is spending than receiving. It is the current annual amount which the government is adding to the already existing national debt.
By contrast, the debt is the accumulation of how much more the government has already spent than received. So one way of seeing the distinction is that our debt is what has happened and the deficit is what is happening.
The banking 'bail out' is a totally seperate account from the above
What yesterdays budget is trying to address is not the national debt - nobody has a problem with that - it's the deficit - in other words the rate at which the debt is increasing
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i agree with the haak ;)
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Oh :o