[from edge2edge]

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)

[robert meldrum]

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.

[Simon@arenaclean]

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.

[Simon Gerrard]

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

[Hilton]

Put simply Simon (no pun intended  )  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.

[carpetmonsters]

The vat increase dont forget is on a lot more products than carpet cleaning which means less disposeable income

Steve

[Joe H]

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?

[Doug Holloway]

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

[robert meldrum]

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.

[Michael Smallwood]

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  

[elliott cleaning]

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

[will_turton]

i agree with the haak

[Simon Gerrard]

Oh