24 November 2008
17:139740I am surprised that I am the first to post on this subject but was amazed at the predictions and hoped it wouldnt happen as it has.
What is the governments idea in this temporary move - the administration alone will take up the difference. Small items wont change in price and if it means that Foreign goods like tvs and cars are cheaper then the only ones that will benefit are the importers.
why on earth did they not target those industries like building that use labour and local materials and would boost that economy, crucial to growth!! Public works investment - take vat off refurbishment ( as it is for new build) and you really would see some change.
This is a huge waste of tax revenue that only those who can manipulate their vat will gain from - not the man in the street. Just like when we went metric.
Add in now a load of extra taxes like NI and LESS people will be employed.
Well I am disgusted.
Someone tell me I've got it wrong...
Sid Pollitt
24 November 2008
18:189741This was part of a package that is hoped will boost the UK economy and does include spending on schools, housing and transport schemes. I think what they are trying to do is give more spending power to people, the VAT measures are also joined in this by a rise in state pension, child benefit etc. Time will tell if they've got it right, but the option to do nothing seems to me to be wholely inappropriate.
Guest 640- Registered: 21 Apr 2007
- Posts: 7,819
24 November 2008
18:259742David there was so much in this complex Budget but at one point he did say he was bringing major building projects forward to stimulate this area of the economy. There is more about the positive measures in the Political Section.
This Budget is getting massive amounts of extra cash into the economy, it is helping massively with mortgage difficulties for example, and making the 10p tax compensation permanent, and of course the vat reduction will stimulate shopping.
Yes its true..the weathier will be taxed more but thats been a long time coming and the NI will increase but only from 2011 as I understand it, when the economy will be back on track.
Just come back to mention this....yes large ticket items will benefit but its not only about importers, the people here in the UK that sell large ticket items...as you say TV's and Cars... will be glad of the stimulus.
Guest 663- Registered: 20 Mar 2008
- Posts: 1,136
24 November 2008
19:359746Robin Hood comes to mined rob the rich to pay the poor as was said to do nothing is not an option, as one of the lowly paid workers anything that helps me pay my mortgage is good in my eyes so hopefully these measures taken will help in all area's but ofcourse it will not please all.
Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
24 November 2008
20:139750I have made a long post on this budget under Politics.
To summarise, I am totally in agreement with David. The VAT cuts does not make any sense at all. The savings that my clients will make will be peanuts and the costs of implementing will be much more than their saving over the 13 months. It would be cheaper for me to offer my clients a rebate of overpaid VAT in 13 months time, plus £1 each to represent interest, than to process a reduction and a further increase!
What on earth does a 2.5% reduction of VAT represent with a background of 10%20% or more price cuts expect to achieve..... This will not have any impact at all.
Just at the time when the fragile economy starts to emerge from the longest and deepest recession since WW2 Darling will be imposing tax rises to dampen it and maybe push us into a second dip recession.
Then there are his hopelessly optimistic forcasts, far more optimistic than any independent forecaster.
Sid Pollitt
24 November 2008
21:139757Barry you seem to have missed my post above; the cut in VAT is part of a package that is hoped will boost the UK economy. Dont worry there'll be plenty of information in the papers tomorrow on the matter if yor're not sure of the facts and figures. It might be a good idea to research financial issues first before making a half-cocked posting, just a tip.
Guest 651- Registered: 12 Mar 2008
- Posts: 5,673
24 November 2008
21:279758Been nice knowing you :)
Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
24 November 2008
22:519760Sid, yes indeed it is a part of a package. An unfunded package that is going make things worse.
Cuts are needed to public expenditure and long term tax reductions.
Guest 640- Registered: 21 Apr 2007
- Posts: 7,819
25 November 2008
07:419768Let's be clear though and I heard a number of people saying it on TV last night too, that prices had fallen 20 or 25% anyway so what use a vat cut...the prices in the shops have NOT fallen by 20 or 25%. Not a bit of it!! Okay Marks & Spencer had a price reduction of 20% last thursday but it was for ONE DAY ONLY. So the £30 shirt in M&S is still £30 now today. I know there are other sales here and there but lets use M&S as a barometer as so many do.
The vat cut and the other measures will give people that extra bit of cash to spend. You might save £20 or whatever on your spend of last week whcih you can then spend to make up your shortfall.
Although we are now in massive debt and its a massive gamble, I heard people on TV last night complaining that it wasnt enough. I think in reality its a lot, its all any government could do.
Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
25 November 2008
07:539769PaulB - It is not all any Government could do...
He has made no attempt to control spending, and through that reduce borrowing, something all families will be doing. He has a vast scope to reduce public spending without touching essential services or capital building projects. He should be stripping away surplus beaurocracy and cancelling wasteful projects of dubious value.
Darling made some weak a gestures regarding the Gershon savings but that was nothing and meaningless.
Guest 653- Registered: 13 Mar 2008
- Posts: 10,540
25 November 2008
09:189777David H and Barry W are completely right.
As the EU control how much VAT should be and how much we can reduce it by, 2 1/2 % is pointless and will cost more to change than the savings made.
Government wastage should be curtailed and job security measures implemented - any benefits given now must be funded, not put on hold and increased taxes, as has been mentioned, it'll cause a double wammy later on.
Roger
Guest 651- Registered: 12 Mar 2008
- Posts: 5,673
25 November 2008
09:449779The bigger issue is who is going to pass on the saving....
For something that is selling for £10 inc VAT, that is £8.51 without VAT. Add 15% back on is £9.78. Is the shop going to change all their prices down by 22p or are they just going to pocket the difference ??
With a £499.99 TV that is only £10.63 and they may reduce them down by a round £10, but anything smaller than that is rediculous !!
Been nice knowing you :)
Guest 645- Registered: 12 Mar 2008
- Posts: 4,463
25 November 2008
09:529781We must be the only nation on earth that moans and grumbles when there are price cuts.I wonder what the response would be if the Chancellor rose VAT by a 'measley' 2 1/2 %.
The idea behind the cut was not just to stimulate the High St (a move which according to the Head of small businesses was greatly welcomed) but also to raise public confidence.
Marek
I think therefore I am (not a Tory supporter)
Guest 660- Registered: 14 Mar 2008
- Posts: 3,205
25 November 2008
10:009784Must agree with Marek,anything that will reduce prices has got to be good,and with the extra money in people's pockets will also help.We have to stop moaning and make the most of the extra money,and yes we will have to pay some of it back,but we can always go and see Barry and he can tell us how to hide what we have got and not pay so much tax,think you could be busy Barry with all these people.
If you knew what I know,we would both be in trouble!
Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
25 November 2008
10:289785I will certaily be doing all I can to help my clients pay less tax, that is for sure, though accountants will be even better place to do this. The impact of the Lasser Curve will actually reduce tax revenue from the highest paid 10%.
Paul aka Scotchie is dead right. It is becoming more and more apparent this morning that the VAT decrease will not always be passed on. It will in many cases be absorbed into margins or built into ordinary sale offers (the same thing really). You cant blame hard pressed retailers for that.
Just think.... The cost of reducing VAT could, instead, have been used to increase nil rate tax bands to £10,000 raising many of the lower paid out of tax all together. That would have had a much greater retail impact.
The big problem here is the temporary nature of this so called tax cut. Taxes will rise just as the economy emerges from recession, a weak recovery would be dampened at the very least with a double dip recession possible.
It is not a matter either of higher taxes 'taking some back', far from it taxes will rise to much higher levels to pay for this. What have been announced is only the start.
Guest 675- Registered: 30 Jun 2008
- Posts: 1,610
25 November 2008
15:479793OK, this is beginning to annoy me but I do agree with Barry W and David H. It is oft stated that the first industry to suffer in a recession is construction and it is also the industry with one of the widest ranges of workforce. If the object is to get people spending again money needs to be put into peoples pockets. Lifting the tax on 'refurbishment' would make more development affordable by taking out demolition costs (and have the added benefit of preserving some of our finer architecture). This would in turn keep people in work, create jobs and give people homes they could afford to buy. In a recession the roof over your head is far more important than ten quid off a new five hundred quid telly.
Politics, it seems to me, for years, or all too long, has been concerned with right or left instead of right or wrong.
Richard Armour
Guest 653- Registered: 13 Mar 2008
- Posts: 10,540
25 November 2008
16:129797Well said Chris.
What are you annoyed about ? agreeing with BarryW and David H ?
Roger
Sid Pollitt
25 November 2008
16:449799Chris, it's a package of measures. The VAT cut isnt for a week or even just for Christmas for that matter. With this and pension and tax credit changes they're hoping to put money in peoples pockets plus they're bringing forward public works on schools, hospitals and transport. The other option is to do nothing. That's what the Tories are suggesting.
Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
25 November 2008
16:589801Sid - it is only for 13 months!!!!
Little of the VAT reduction will be passed on.
It would have been far better to raise the starting point for income tax to £10,000 at the same cost as the VAT reduction. That really would help people and boost spending power. Then cut public spending so you dont have to take it all back again, with interest.
Conservatives do nothing - pure nonsense, Labour spin and nothing but..... A whole raft of measures have been announced, some of which have been copied. The key though would be to cut public spending, absolutely essential.
Sid Pollitt
25 November 2008
17:039802I think you're wrong Barry. Oh, can you tell us why it took you so long yesterday to comment on the pre budget report, did it really take Central Office to get the spin machine working? That's a worry dont you think.
