Tax Cut

[NellyD]

I just been watching the news on the proposed Tax Cut to 15%...To create more spending in the shops and to get the money flowing.....

Mr Brown promised that the Government's long-term plans to pay off the debt - predicted to soar above £100 billion - would be laid out for voters "fairly and squarely".
While details of the highly-anticipated PBR were being kept under wraps, its centrepiece is thought be a cut in VAT from 17.5% to 15%. Such a move would cost £12.5bn, accounting for much of the £15 to £20bn cost of the Government's Keynesian-style intervention to boost the economy. Its appeal lies in bringing down the cost of goods to spur consumer spending and get the shrinking economy moving again.

[Hideous]

Might be a worthwhile saving for people who are going to buy new cars - I think that's why they have done this, as new car sales are looking very sick at the moment.
Other than that, 2.5% saving is no biggie for small value items. Save £2.50 on a 100 quid xmas present, for instance.

[brifen]

The goverment could and IMO should cut the tax on fuel. Not only Petrol/Diesel but gas, oil and electricity too. Petrol/Diesel mainly though.

This would cut transport costs make goods cheaper, food cheeper and general running costs for everything and everyone (Industry too) this could really have an effect on kick starting the economy again with the average man (or woman) on the street having some actual cash in their pockets again.

The cost of Booze and Fags can rocket for all I care to compensate, could make the NHS better off and atually deliver a proper service?? As well as tackling crime figures and aiding the Police to actually make their targets?? Although i'm a firm believer in that the Police should not have set quotas or targets set in the first place as IMO they are counter productive and make the Service tackle easy targets to make up figures instead of actual Police-ing.

What do you think??? Scrap fuel VAT altogether and keep the 17.5% would that be too sensible.

Bri.

[VauxVeteran]

Believe me, love him or hate him he is doing the right thing right now, the last thing we need is for spending to stop, and remember 15% of £200 billion is a lot of tax where 17.5% of nothing is nothing.

[yorkshireborn]

do u think the shops will lower everything by 2.5%, i dont.

[mark1319]

do u think the shops will lower everything by 2.5%, i dont.

Good point, it's all well and good doing it, but then enforcing it is another matter and something this government don't do very well IMO.

[67688c]

Good point, it's all well and good doing it, but then enforcing it is another matter and something this government don't do very well IMO.

Obviously it does not affect the actual price the store gets, price of goods will remain the same. The vat part is nothing to do with the store, and will come off the full price automatically, it just means that the dealer will be paying the government less when he sends his vat returns in. Of course you may be suggesting that the dealer or shop may likely increase prices by a similar amount, so in effect the price remains the same.. IOW the shopkeeper rips us off...lol I have a relatives that live outside of the UK and they dont pay VAT at all on many of the items they take back with them as long as they can show they live outside of the UK. VAT was started on April Fools Day (April 1st) in 1973 at 10% supposedly as a tempory measure, and they have been taking us for fools ever since. (so much for the 'tempory') lol.

[mark1319]

Never knew about how VAT was introduced, learn something new everyday

Ref. the shops and raising their prices, especially with the current economic state they might well sieze this opportunity to make whatever profit they can, but we shall wait and see.

It's not something that I'm going to notice TBH, say I save £25/month which I wont, that's nothing. 2.5% is about as much use as a chocolate fire guard IMHO.

[ukanalyst]

Now been announced it is going to happen ... sounds good to me TBH

do u think the shops will lower everything by 2.5%, i dont.

Depends on what you mean by 'shops' ... if you mean corner shops with pricing guns then I would suggest not for quite a long time! If you mean larger shops/online retail etc with some sort of EPOS (Electronic Point of Sale) system then the VAT rate should be an adjustable value that's added onto the sale amount and applied to all 17.5% (now 15%) rate Vatable items in a blanket fashion so ... yes

Some items such as books and food are VAT exempt of course and other items have different levels of VAT applied such as contraceptives (currently 5%) so you won't see those prices change on the high street as a result of this decision

[neilshaw1980]

Well one retailer has already announced that it will be raising its prices, Sony said they will be putting up their prices in the UK and other Japenese electronics companies are expected to follow suit too.