Mud-club
Chat & Social => The Bar - General Chat => Topic started by: Yoshi on November 23, 2008, 12:17:08
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Was reading this in the paper this morning, found the story on the bbc news website as well. BBC News (http://news.bbc.co.uk/1/hi/uk_politics/7744273.stm)
Looks promising, maybe they will lower fuel duty as well :-o
Stranger things have happened!
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I do find myself wondering how many high street stores will really cut their prices by 2.5% if this happens - those who quote prices excluding VAT will have to but I wouldn't be surprised if the rest find some excuse not to pass it on...
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When they put it up from 15% years ago they said then it would'nt last long at the new rate and it would go back to 15% in a while.
If it happens it's been a long while if you ask me.
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This could be a pain for small shops, although the savings could offset that.
I worked in a shop when the VAT lifted from 15 to 17.5% and we had to re price every single item as it was stick on price tickets!
I wouldnt want to do that with christmas stock in, perhaps its soon engough before. Mind you moist Christmas lines are rubbish so they deserve the work.
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.......moist Christmas lines are rubbish .......
Hmmm..... moist Christmas lines? The mind boggles ;) :lol:
I can't help feeling a reduction in income tax would benefit people more than a cut in VAT. Not me though .... I don't earn enough :(
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What would the pound shops do?
Become 97.8p shops :-)
Mike
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The only possible saving I can see myself making from this will be in my MOT soon??
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Vat isnt put on MOT tests, :grin:
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Many businesses have been having a hard time of it with rising costs and reduction in retail sector spending. The problem with reducing VAT is that businesses may see it as an oportunity to put their prices up to make up for losses they have been seeing. That way, retail customers won't see any price reductions at all.
If they were to reduce income tax, people would genuinely see more money in their pocket and be tempted to spend it. That is what they are trying to encourage, after all.
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They're talking about a 45% income tax band for people earning £150k plus to fund it - don't think that will affect many of us, but it'll do a nice job on the bankers who are responsible for the whole mess! :lol:
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Vat isnt put on MOT tests, :grin:
isn't it? didn't know that! How come every other garage bill you get does? (obviously if the garage is VAT registered!!)
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Been looking at this for our shop, and according to 1 expert we will have to reduce our prices on the goods that do attract VAT by 2.1%. Well sorry but we will be using 2%.
Wooppee, an extra 0.1% profit!!!!!
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on the radio earlier they were saying a chocy bar will come down by 2p and a £100 item will come down to £95. Not really a huge saving but all adds up I suppose! :roll:
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Vat isnt put on MOT tests, :grin:
isn't it? didn't know that! How come every other garage bill you get does? (obviously if the garage is VAT registered!!)
It's the test that is zero rated for VAT. The rest of the garage services are VATable.
on the radio earlier they were saying a chocy bar will come down by 2p and a £100 item will come down to £95. Not really a huge saving but all adds up I suppose! :roll:
Their maths is a little poor, isn't it? An item costing £100, including VAT, now would be £97.88 with 15% instead of 17.5%. And to my reckoning, a 40p sweet will loose less than a penny!
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on the radio earlier they were saying a chocy bar will come down by 2p and a £100 item will come down to £95. Not really a huge saving but all adds up I suppose! :roll:
Their maths is a little poor, isn't it? An item costing £100, including VAT, now would be £97.88 with 15% instead of 17.5%. And to my reckoning, a 40p sweet will loose less than a penny!
Maybe they were talking about a huge Toblerone :lol:
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Duty on fuel, booz and fags is being put up by 2.5% to offset the drop in VAT. So no change. The BAD news is that when VAT goes back up to 17.5% this extra duty won't drop.
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OK.. time for a sanity check as this useless bunch of numpties appear to have locked themselves in the asylum (oh how sweet that would be... :P )
Who is actually going to implement this 'reduction in VAT'?
Small businesses...
Who isn't going to get paid for all the work they do? Yep, you've got it... small businesses!
Take a business that I used to be involved in... a caterer who runs the public catering in a major tourist attraction. At last count there were something like 280 options on the cash tills and there were a total of 17 tills around the site.
Each till will need to be re-programmed - some items are VAT free, some are at full rate but need to be revised and some are alcohol and will therefore remain at full rate. Each till will take around an hour to an hour and a half to re-programme... so who's up for working a night shift on Sunday?
Methinks Mr Darling will be cosy in his bed...
AND THEN...
When the next VAT inspection comes around... who's going to cop for the inevitable fines and penalties because the poor small businessman has got it wrong somewhere, somehow?
Given that there is no VAT on mortgages, rent, food (apart from choccy biccys...) and the rate for domestic power isn't changing, I fail to see how this is going to dramatically bump start the economy as peoples' disposable income won't change.
So glad they have thought this through...
Rant over... sort of! :evil: :evil: :evil:
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OK.. time for a sanity check as this useless bunch of numpties appear to have locked themselves in the asylum (oh how sweet that would be... :P )
Given that there is no VAT on mortgages, rent, food (apart from choccy biccys...) and the rate for domestic power isn't changing, I fail to see how this is going to dramatically bump start the economy as peoples' disposable income won't change.
Won't it,
Vat goes down by 2.5%
Alchohol, tobacco and fuel INCREASES by 2.5%
so thats 3 items up, one down!!!
And on top of that, NATIONAL INSURANCE IN INCREASNG BY 0.5%
So by my calculations i'll be WORSE off financially, can see myself rushing off to the shops as I write this :evil: :evil: :evil:
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Won't it,
Vat goes down by 2.5%
Alchohol, tobacco and fuel INCREASES by 2.5%
so thats 3 items up, one down!!!
Nah... disposable income won't change... at least not in terms that will make a real difference, but the split of how they tax you when you do get around to spending the pittance that they have graciously left you will change and it would appear that it will be for the worse.
We're doomed... we're doomed!
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Just another thought.....
Given the change is set for Monday, retail outlets are likely to have a dire week before then, aren't they? Let's face it, who is going to do non-essential shopping this week when they can make a small saving next week? Have the government considered businesses cash flow?
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It really is more of a psychological thing than a real one. It's £2.50 for every £100 you spend. In other words you might save £10 if you spent £400 on Christmas stuff - not much really is it!
But if you think about it, the whole recession business is psychological. People hear rumours of it, reduce their spending, and hey presto you have reduced economic growth.
I too was pondering the short-term effect on cashflow - suspect there will be a dip in takings! Nobody seems to know whether it's a case of it coming in on Monday (as in, anything bought from 00:01 on Monday will be taxed at 15%) or whether it comes in from Monday (as in, from 00:01 Tuesday).
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I too was pondering the short-term effect on cashflow - suspect there will be a dip in takings! Nobody seems to know whether it's a case of it coming in on Monday (as in, anything bought from 00:01 on Monday will be taxed at 15%) or whether it comes in from Monday (as in, from 00:01 Tuesday).
I have the statement from HM Revenue & Customs in front of me and is says "..... goods or services on or after the 1st December....". So it's Sunday night onwards.
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And on top of that, NATIONAL INSURANCE IN INCREASNG BY 0.5%
Thas the bit I like best, so If you are finding the present market hard on your income and expenditures, they'll just take more money so you have to cut back even more!
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I don't pay NI :dance:
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And on top of that, NATIONAL INSURANCE IN INCREASNG BY 0.5%
Thas the bit I like best, so If you are finding the present market hard on your income and expenditures, they'll just take more money so you have to cut back even more!
so really VAT is going down by 2% not 2.5!
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And on top of that, NATIONAL INSURANCE IN INCREASNG BY 0.5%
Thas the bit I like best, so If you are finding the present market hard on your income and expenditures, they'll just take more money so you have to cut back even more!
so really VAT is going down by 2% not 2.5!
Plus a huge hike in income tax for high earners to more than compensate for the 2.5% cut in VAT. You don't get anything for free in the world.
And what about this.....?
http://www.telegraph.co.uk/finance/financetopics/budget/3521525/Pre-Budget-report-Secret-plan-for-VAT-increase-to-18.5-per-cent.html
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The move to increase fuel duty by 2p has been introduced to offset the rate cut in VAT from 17.5% to 15%. However, although the VAT holiday will last 13 months, the 2p duty rise is permanent.
When VAT returns to 17.5% motorists will still be paying the higher rate fuel tax of 52.35p per litre and the higher rate VAT, making tax 74% of the total cost of a litre of fuel, and instantly boosting the cost of fuel by 2p a litre.
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so really VAT is going down by 2% not 2.5!
Plus a huge hike in income tax for high earners to more than compensate for the 2.5% cut in VAT. You don't get anything for free in the world.
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Something I dont need to worry about being a bin man :lol:
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Plus a huge hike in income tax for high earners to more than compensate for the 2.5% cut in VAT. You don't get anything for free in the world.
What huge hike in income tax? 1st of all this "45%" rate does not come in till 2011!! After the VAT has been increased back up again! And ontop of that, there are already lots of different rates for income tax
for incomes above £43,875 to £100,000, the rate of tax will be 40%.
For incomes from £100,000 to £106,475 the rate will increase to 50%.
For incomes above £106,475 up to £140,000, the rate drops to 40% again.
For incomes of £140,001 to £146,475 the tax rate is again 50%
and for incomes above £150,000 the rate will be 45%
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The move to increase fuel duty by 2p has been introduced to offset the rate cut in VAT from 17.5% to 15%. However, although the VAT holiday will last 13 months, the 2p duty rise is permanent.
Bwuh!?!???!
That's totally out of order - I know they've been looking to bring that in for months but that's totally by the back door.
I'll be surprised if they somehow get back in at the next election - not that I think the Tories would be any better.
Z~
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The worrying part about that is that we have seen falling voter turn-outs for some time, as people have become politically apathetic (presumably because the two big parties are now more or less identical...). People have died for the right to vote, and now people can't be bothered to go into town and put a cross on a bit of paper? :evil:
Of course, it suits politicians as they can always mobilise enough supporters to ensure the result they want. Danger is, it also works well for the minority extremist groups as they don't need many votes to tip things their way...
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They're talking about a 45% income tax band for people earning £150k plus to fund it - don't think that will affect many of us, but it'll do a nice job on the bankers who are responsible for the whole mess! :lol:
Contrary to common belief, very few "bankers" get huge salaries.
The source of the current problem isn't British based - it comes from America where their interest rates were kept artificially low for a very long time. This meant that people who wouldn't ordinarily be able to borrow money were able to - unfortunately, being the type of people who can't ordinarily get credit, they bit off more than they could chew and couldn't replay the loan.
It doesn't matter how many times you say "your home is at risk if you don't keep up repayments" if the people doing the borrowing don't fully understand the implications - and before you say "well they shouldn't have been lent the money then", how do you prove that you understand the risk? Sign the agreement? That's what they did.
A bank is a bit like a fountain - money is constantly flowing in, while some is pouring out the bottom. As long as the amount coming in matches the money flowing out, all is well.
The money going out is made up of people withdrawing money, drawing mortgages and loans, and other banks borrowing money to make sure their own fountain keeps flowing.
If the money coming in dries up, then because money is still flowing out eventually it runs dry.
The banks stopped lending to each other because they had nothing to guarantee the loans. Until then, Bank A asked for a loan and Bank B said "OK, but what are you going to secure it against in case you can't repay it?" and Bank A offered it's mortgages - usually a safe option because people aren't going to risk losing their homes by not paying up.
Once lots of people stopped repaying their mortgages, Bank A was offering mortgages as security (like your house is for your mortgage) but Bank B said "Err... nope. Not accepting those now", so Bank A can't get the loan.
Net result: the current situation.
There are lots of other things that have contributed in one way or another to it - you can't put the blame on any one of them. Yes, there were greedy people working in banks, but there were greedy people pushing up the price of houses too. And greedy estate agents who got bigger commissions. And greedy mortgage brokers who encouraged people to borrow more than they ought... You get the idea.
Sorry for the long (and dull) post, but I hope it's explained, at least in part, what's been going on.
The bank I work for has been nationalised, is being broken up and sold off. I may or may not have a job when I come back after Christmas - time will tell.
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Interesting what they "slip in" while the headlines focus on "CUT IN VAT RATE" & "TAX ON THE 'SUPER RICH' ANNOUNCED"
So the government are cutting VAT on fuel, but adding +2p per litre in duty. Assuming that the +2p duty is applied net of VAT, as they are two different taxes on the same commodity, I decided to "do the maths" as the Ameriscans say ........
Whilst at Tescos tonight, I noted the fuel prices and "did the maths"
Unleaded Fuel
Currently 89.9 ppl (76.51p net of 17.5% VAT)
What will it be once the new duty is added? 78.51p+15% VAT = 90.29 ppl An increase of 0.39 ppl
DERV
Currently 104.9 ppl (89.28 net of 17.5% VAT)
What will it be from Monday? 91.29p +15% VAT = 104.97 ppl Slight increase of 0.07 ppl
Hmmm ..............
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They're talking about a 45% income tax band for people earning £150k plus to fund it - don't think that will affect many of us, but it'll do a nice job on the bankers who are responsible for the whole mess! :lol:
Contrary to common belief, very few "bankers" get huge salaries.
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Good Summary KTM ... I work for one of the big investment banks in one of their Tech teams - I get paid a good salary, but it certainly isn't anywhere near the £75,000 that gets bandied about the newspapers that say everyone working for a bank gets.
It really gets my goat (meh!) that the press post all this stuff about "greedy bankers" having their Christmas parties and spending all the cash - actually all entertaining for staff was previously closely controlled with a maximum of $20/head (about £13).
So what happens now ... all Christmas parties are suspended ... what's the effect? The hotels & bars don't get as much business - get cancellations at the last minute so can't rebook. The hotels end up making less money over Christmas so come the New Year - the hotels & bars have to let people go to keep afloat (or they actually do go under).
Those people then start claiming unemployment (higher demand upon Govt spending) and are spending less, driving less, so the shops, petrol stations & garages are making less money.
Just heard from my mates yesterday they'd be getting laid off come May once their project runs out - their redundancy'll carry them through to December next year if they don't get something else ... by which time the country might be at the bottom of the dip.
Have a nice weekend
:)
Z~
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Yes. I think the sweeping statements made by the press leave the public thinking the entire banking industry is to blame. In reality, it is certain people within certain departments of certain banks that can, and should, be held accountable for their irrisponsible behaviour.