VAT temporarily lowered to 15%

[aruaspie]

http://business.timesonline.co.uk/tol/busi...icle5225717.ece

 

Will this temporarily VAT decrease affect you?

[ScienceGeek]

More than likely not. We will still have the same amount to spend, 2.5% is nothing really on the small purchases we make. A reduction in income tax would have been more appropriate, especially for those who would have been in the 10p rate. It doesn't matter how much you cut the VAT, if people don't have any disposable income then they won't have any to spend.

[Canopus]

It might be an attempt to counteract the zero VAT rating on food, books, newspapers, children's clothes, transport fares, and water bills that is supposed to come to an end in 2010 under an EU directive.

 

If you didn't already know:

 

1. Imposing VAT is a requirement of EU membership.

 

2. National governments can only impose an odd tweak to VAT rates here and there as the EU and not national governments have almost complete control over VAT.

[TheNeil]

Well I bought an advent calendar at the weekend and the shop had already reduced VAT (well, they knocked 2.5% off) and I saved 7p. As you can imagine, with savings like this it'll make a massive difference...or not

Edited December 1, 2008 by TheNeil

[chris54]

A reduction in income tax would have been more appropriate, --

 

That is assuming that your income is sufficient to pay income tax in the first place.

 

A reduction in VAT will have no affect on the amount I spend, I can only spend what I have.

Last month I had to buy a new washing machine, with the lower VAT rate I would have payed about �5 less. Bearing in mind that it was already reduced by something like �70, all that would have happened most likely is it would have been reduced by �65 instead.

[Tally]

It will create a huge amount of admin for businesses, which could be especially bad for small businesses. Most retailers are not likely to pass on the reduction to the customer.

 

They are talking about another �60 tax rebate. I would prefer a tax cut, as a one-off �60 soon disappears.

[Canopus]

It will create a huge amount of admin for businesses, which could be especially bad for small businesses. Most retailers are not likely to pass on the reduction to the customer.

 

Some European countries, France in particular, vary their VAT rate by as little as plus-minus 0.25% almost every year.

 

[lynne]

 

 

Not all businesses will pass it onto the customers. The reduction will cause more admin problems than benefit everyone.

 

 

Most people will only gain a few pounds.

 

 

It was not a good decision to be made by parliament.

 

 

 

[Tally]

Well I had a nice surprise today when I went shopping for Christmas presents, everything turned out cheaper than the labels - albeit by only a very small amount. I shopped in large chain stores though, I don't know how smaller local shops and businesses will cope with the change. They are not used to making the change. Many small businesses are owned by people who have marketable practical skills but have little business knowledge, and will have to pay outside people to help them with this. They are only going to lose out.

 

It could make a big difference if you are planning on a large purchase like a car or electrical item. It's a shame I spent so much on fixing my car last month, I might have saved a bit if the MOT hadn't been due.

[chris54]

On the radio today there was some one saying that they, small retailers , see the reduction in VAT as a means of increasing their margin rather that reducing prices.

 

Went shopping today and saved 3p.

[ScienceGeek]

We bought some DVDs and saved 13p

[chris54]

Just realised. We are having some work done on the house in the new year and we will be saving over �250. and with lower interest rates as well we are quids in.

[NobbyNobbs]

my mother was talking to someone in the local off-license the other day (she was trying to track down a miniature bottle of something for some cooking) and it turns out that VAT has dropped, but they've put up the tax on alcohol secretly at the same time. doesn't bother me but i found it interesting that the governement are still up to their old tricks...

[chris54]

my mother was talking to someone in the local off-license the other day (she was trying to track down a miniature bottle of something for some cooking) and it turns out that VAT has dropped, but they've put up the tax on alcohol secretly at the same time. doesn't bother me but i found it interesting that the governement are still up to their old tricks...

They did the same with petrol.

 

It wasn't secretly (it was in papers) just didn't say much about it.