Bolitics The New Condem Government

[bickster]

...would still mean the average shopping bill would be about £175 a week. That does seem somewhat unlikely.

I easily spend that amount a week for a family of three

Aye, but Col's maths was wrong. the vat on fuel doesn't add 2.5% to a supermarket bill on top of the other 2.5% for vat on no fresh food items. That would only be the case if the costs to the supermarket of moving the goods around was the same as the actual value of the goods themselves, and it's clearly nothing like.

Yes I accept that, I was just pointing out that an average shopping bill of £175 a week isn't anywhere near as outrageous as Col was suggesting

[blandy]

Are you guys forgetting that VAT has been raised from 17.5% to 20%?

No! that's what the discussion was about - the 2.5% increase

[Risso]

Why are they perusing Barlow now? Why didn't they close the stable door?

Labour and the Tory led coalition like to look like they're cracking down on tax avoidance, but the reality is they're not.

Edit - some reading on Green policy for those who might be interested.

http://www.greenparty.org.uk/news/17-03-2011-tax-evasion-bill-parliament.html

The coalition have done loads to crack down on tax avoidance, absolutely loads.

[villaajax]

 

Why are they perusing Barlow now? Why didn't they close the stable door?

Labour and the Tory led coalition like to look like they're cracking down on tax avoidance, but the reality is they're not.

Edit - some reading on Green policy for those who might be interested.

http://www.greenparty.org.uk/news/17-03-2011-tax-evasion-bill-parliament.html

The coalition have done loads to crack down on tax avoidance, absolutely loads.

 

 

By letting millionaire pay less of it?

[peterms]

Excellent bar chart from our conservative chums. Good to see that expensive educashun wasn't wasted.

[thetrees]

Are you guys forgetting that VAT has been raised from 17.5% to 20%?

Wasn't it dropped from 20% to 17.5% in a politically motivated, but highly ignorant moment, only to be raised again?

[villaajax]

Well, that's just like your opinion, man.

[lapal_fan]

Are you guys forgetting that VAT has been raised from 17.5% to 20%?

Wasn't it dropped from 20% to 17.5% in a politically motivated, but highly ignorant moment, only to be raised again?

It was 17.5%. Then they dropped it to 15%. And then they raised it to 20%.

[thetrees]

Tax avoidance schemes were available under the last government as they are this. The morality of them, as I alluded to in my posting, is highly questionable.

I wonder about this morality thing, with tax. It's become a kind of stick with which to avoid a "problem" - it blames the Co. or individual for something quite legal - directing our anger at the wrong target.

Sure looked at from our "little people" perspective, it's hard to take that we pay income tax and vat and NI etc that makes up a huge chunkof our income - 30 or 40% or so. Meanwhile a company pays next to nowt on their money earnt in the UK. so on the face of it, "it ain't fair".

 

On the other hand, if any Gov't wants to introduce more morality or fairness into things, they can. Stop blaming the Co.s and change the law. It's a political get out and excuse for inaction.

 

I am totally infavour of these CO.s and individuals paying more tax, but not through appealing to their morality, or appealing to "little people" to direct anger at them. Just get on and change the law, where necessary with the EU and other countries.

The company thing is highly emotive.

In my opinion companies like Vodafone and Starbucks are in the UK economy for what they can get out of it, so no sweeteners necessary.

If you look at manufacturing, a couple of examples that spring to mind are HP and Peugeot. In the case of HP production was switched to a Dutch plant with higher production costs, but one that was more costly to close down than a UK plant.

With Peugeot a similar situation. They wished to devolve some production to Eastern Europe, so the easiest plant to close was the UK one.

So, tax breaks for companies that create manufacturing jobs, I am in favour of. But 'deals' with companies that are only in the UK for revenue purposes should not be considered.

[drat01]

Are you guys forgetting that VAT has been raised from 17.5% to 20%?

Wasn't it dropped from 20% to 17.5% in a politically motivated, but highly ignorant moment, only to be raised again?

eh? Confused a bit here. Permanent vat rises have only ever been introduced by tory gvmts

[thetrees]

Are you guys forgetting that VAT has been raised from 17.5% to 20%?

Wasn't it dropped from 20% to 17.5% in a politically motivated, but highly ignorant moment, only to be raised again?

It was 17.5%. Then they dropped it to 15%. And then they raised it to 20%.

Thanks. I remembered the silly drop, but clearly forgot what the rate was at the time.

[drat01]

Using Wiki as the source here is a summary of VAT rates and who raised them and who lowered them

 

 

History

Between October 1940 and 1973 the UK had a consumption tax called Purchase Tax, which was levied at different rates depending on the goods' luxuriousness.^[3] Purchase Tax was applied to the wholesale price, initially at a rate of 33¹⁄₃%. This was doubled in April 1942 to 66²⁄₃%, and further increased in April 1943 to a rate of 100%, before reverting in April 1946 to 33¹⁄₃% again. Unlike VAT, Purchase Tax was applied at the point of manufacture and distribution, not at the point of sale. The rate of Purchase Tax at the start of 1973, when it gave way to VAT, was 25%.

On 1 January 1973 the UK joined the European Economic Community and as a consequence Purchase Tax was replaced by Value Added Tax on 1 April 1973.^[3][6][7] The then Conservative Chancellor Lord Barber set a single VAT rate (10%) on most goods and services.^[3][6][7]

In July 1974, Labour Chancellor Denis Healey reduced the standard rate of VAT from 10% to 8% but introduced a new higher rate of 12.5% for petrol and some luxury goods.^[3][6][8] In November 1974 Healey doubled the higher rate of VAT to 25%.^[6] Healey reduced the higher rate back to 12.5% in April 1976.^[6][8][9]

Conservative Chancellor Geoffrey Howe increased the standard rate of VAT from 8% to 15% and abolished the higher rate in June 1979.^[3][6][10] The rate remained unchanged until 1991, when Conservative Chancellor Norman Lamont increased it from 15% to 17.5%.^[3][6][10] The additional revenue was used to pay for a reduction in the hugely unpopular community charge.^[10] During the 1992 general election the Conservatives promised not to extend the scope of VAT, but, in March 1993, Lamont announced that domestic fuel and power, which had previously been zero-rated, would have VAT levied at 8% from April 1994 and the full 17.5% from April 1995.^[7][11] The planned introduction of VAT on domestic fuel and power went ahead in April 1994, but the increase from 8% to 17.5% in April 1995 was scuppered in December 1994, after the government lost the vote in parliament.^[6][11]

In its 1997 general election manifesto, the Labour Party pledged to reduce VAT on domestic fuel and power to 5%.^[12] After gaining power, the new Labour Chancellor Gordon Brown announced in June 1997 that the lower rate of VAT on domestic fuel and power would be reduced from 8% to 5% with effect from 1 September 1997.^[13][14] In November 1997, Brown announced that the VAT on installation of energy saving materials would be reduced from 17.5% to 8% from 1 July 1998. Brown subsequently reduced VAT from 17.5% to 8% on sanitary protection products (from 1 January 2001); children's car seats (from 1 April 2001); conversion and renovation of certain residential properties (from 12 May 2001); contraceptives (from 1 July 2006); and smoking cessation products (from 1 July 2007).

In response to the late-2000s recession, Labour Chancellor Alistair Darling announced in November 2008 that the standard rate of VAT would be reduced from 17.5% to 15% with effect from 1 December 2008.^[15][16] In December 2009, Darling announced that the standard rate of VAT would return to 17.5% with effect from 1 January 2010.^[17][18]

In the run up to the 2010 general election there were reports that the Conservatives would raise VAT if they gained power.^[19][20][21] The party denied the reports.^[22][23] Following the election in May 2010, the Conservatives formed a coalition government with the Liberal Democrats and in June 2010 Conservative Chancellor George Osborne announced that the standard rate of VAT would increase from 17.5% to 20% with effect from 4 January 2011.^[24][25]

Edited May 12, 2014 by drat01

[Kingfisher]

Another example of the government picking on the most vulnerable in society. This time they're putting the boot into the disabled as the axe falls on the independent living fund.

http://www.theguardian.com/commentisfree/2014/mar/31/independent-living-fund-disabled

Maybe we could afford to give disabled people a decent quality of life if millionaires like Dave's mate Gary Barlow (the new poster boy for tax dodgers) were not allowed to be selfish and greedy.

Tories 'cleaning up the mess'.

Edited May 12, 2014 by Kingfisher

[Rovers13]

VAT, or sales tax, is regressive in nature. Not sure why dropping it is silly.

[MakemineVanilla]

VAT, or sales tax, is regressive in nature. 

 

Exactly!

 

What made me chuckle was how the Tories scrapped one regressive tax, the community charge, for another, an increase in VAT, and the Left considered it a victory.

 

The fact that VAT started off at 10% and has subsequently doubled demonstrates the nature of the State, and that once it has introduced a tax, like income tax was only a temporary measure, it gradually finds the need to increase it.

 

But, more importantly, when compared with purchase tax, VAT looks very much like a regressive blunt instrument, imposed upon the country by the needs of the Common Market.

 

Certainly, the ability to vary purchase tax to help the poor, would be an excellent means to off-set the UK's present economic inequality.

 

Not as though any party is bothered by inequality, but if they did happen to care, taxing luxury goods at one rate and ordinary stuff at another would be useful. 

Edited May 13, 2014 by MakemineVanilla

[colhint]

not sure that idea would work though, there is enough fiddles on VAT as it is, when Governments make things more difficult to administer, it often results in 2 things, the cost of administering it outweighs the return and the fiddles increase.

[MakemineVanilla]

not sure that idea would work though, there is enough fiddles on VAT as it is, when Governments make things more difficult to administer, it often results in 2 things, the cost of administering it outweighs the return and the fiddles increase.

 

There are plenty of economic arguments against purchase tax, in terms of stifling trade and innovation etc, but if a party considered remedying the massive inequality in UK (second only to Portugal in Europe) a priority, then the ability to vary the tax between a Cartier watch and Casio, would be useful.

 

There is no doubting the fact that where ever there is a tax, people will try to avoid it, whether it is the Swiss driving to France to buy food, or Brits going on their booze cruises. 

[meregreen]

If incomes were not so low for so many people, taxes would not be an issue. Low pay is the problem.

[thetrees]

VAT, or sales tax, is regressive in nature. Not sure why dropping it is silly.

The drop during the last administration was silly, because it was supposedly to stimulate spending during a deep crisis.

So the 2.5% drop meant that the £1000 telly was now £975, but you can't afford the telly any way.

Just another example of playing with taxes for the sake of political point scoring, something that both of our major parties are guilty of.

Whether sales tax is regressive or not is a separate discussion that's not for me.

[thetrees]

If incomes were not so low for so many people, taxes would not be an issue. Low pay is the problem.

Wasn't the minimum wage introduced to eradicate low pay?