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VAT 'will rise' under coalition government
http://www.x404.co.uk/forum/viewtopic.php?f=19&t=8223		 Page 1 of 3
Author:  Amnesia10 [ Thu May 13, 2010 7:06 am ]
Post subject:  VAT 'will rise' under coalition government
http://news.bbc.co.uk/1/hi/business/10112936.stm

Quote:
VAT is set to rise under the new coalition government, according to a BBC survey of influential economists.

Of 28 independent economists currently used by the Treasury to assist its forecasts, 24 said they expected the rate to rise in the coming parliament.

The majority predicted a rise from the current 17.5% to 20% before the end of 2011. Analysts say a 20% rate would raise an estimated £11.5bn a year.

VAT was temporarily cut last year to 15% to aid the economic recovery.

But the tax on consumer goods is seen as an attractive way to boost the government's tax income, with cutting the country's budget deficit a priority for the new Conservative-Liberal Democrat coalition.

There are 35 economists listed as independent consultants for the Treasury's UK economic forecasts. Six declined to take part in the BBC's survey.
Author:  adidan [ Thu May 13, 2010 7:15 am ]
Post subject:  Re: VAT 'will rise' under coalition government
A very easy way of boosting funds, not unexpected.

Our VAT is relatively low compared to many EU countries and, TBH, I didn't notice the drop down to 15%.

The main losers would be those on low wages or benefits. However, when coupled with the increase in personal allowance the blow should be much easier to take for workers and those on JSA who could see taking a lower paid job as beneficial.

I can accept that with the Tory agreement not to give inheritance tax breaks for the uber rich and the taxing of banks.
Author:  Amnesia10 [ Thu May 13, 2010 7:43 am ]
Post subject:  Re: VAT 'will rise' under coalition government
adidan wrote:
A very easy way of boosting funds, not unexpected.

Our VAT is relatively low compared to many EU countries and, TBH, I didn't notice the drop down to 15%.

Agreed, but I would prefer they started to get rid of the myriad of small taxes and roll them all up into income tax.

adidan wrote:
The main losers would be those on low wages or benefits. However, when coupled with the increase in personal allowance the blow should be much easier to take for workers and those on JSA who could see taking a lower paid job as beneficial.

The low paid will suffer even more when the minimum wage does not increase. The Tories have pledged to freeze the minimum wage. So no need to give that domestic cleaner a pay increase. I agree that the tax allowance increase can make

adidan wrote:
I can accept that with the Tory agreement not to give inheritance tax breaks for the uber rich and the taxing of banks.

Yes but an increase of income tax would have been much fairer.
Author:  timark_uk [ Thu May 13, 2010 7:47 am ]
Post subject:  Re: VAT 'will rise' under coalition government
Amnesia10 wrote:
http://news.bbc.co.uk/1/hi/business/10112936.stm
VAT *is predicted* to rise …
Yet more sloppy journalism from the BBC.

Mark
Author:  TheFrenchun [ Thu May 13, 2010 8:11 am ]
Post subject:  Re: VAT 'will rise' under coalition government
VAT rises... people buy less. Shop close, factory go out of business. More unemployed oh dear!
Author:  big_D [ Thu May 13, 2010 8:18 am ]
Post subject:  Re: VAT 'will rise' under coalition government
19-20% seems to be more typical, in Europe, so it isn't really a surprise.

We also have to pay VAT on pretty much everything - food etc. is covered.
Author:  big_D [ Thu May 13, 2010 8:23 am ]
Post subject:  Re: VAT 'will rise' under coalition government
TheFrenchun wrote:
VAT rises... people buy less. Shop close, factory go out of business. More unemployed oh dear!

1.5 - 2.5% more and people buy less? :? The 2% increase here didn't affect sales, that said, it was less than inflation increases, so it pretty much disappeared under the radar, after the news programmes played it up for a week or so, then it turned into a non-story.
Author:  timark_uk [ Thu May 13, 2010 8:27 am ]
Post subject:  Re: VAT 'will rise' under coalition government
big_D wrote:
19-20% seems to be more typical, in Europe, so it isn't really a surprise.
It might not be a surprise but it'll be a very unwelcome increase should it happen.
People have been on pay freezes for the past couple of years so whilst the overall cost of living has increased the wages haven't. Couple this with the proposed increase in NI contributions and I really can't see there being much benefit in doing this.

Mark
Author:  Amnesia10 [ Thu May 13, 2010 9:36 am ]
Post subject:  Re: VAT 'will rise' under coalition government
Well NI is not going up but the next ten years will be austerity years regardless of what the politicians say. The problem is how they spread the pain. If the rich still get huge pay increases when the rest of us are having to deal with higher taxes and lower incomes then expect to see a savage backlash eventually, maybe not like the greeks but more demonstrations and voting out the Tories and LibDems.
Author:  Linux_User [ Thu May 13, 2010 9:38 am ]
Post subject:  Re: VAT 'will rise' under coalition government
VAT is an awful tax. They should increase income tax instead.
Author:  timark_uk [ Thu May 13, 2010 9:39 am ]
Post subject:  Re: VAT 'will rise' under coalition government
Amnesia10 wrote:
maybe not like the greeks
I outlined my take on this in another thread hereabouts, but to paraphrase, I don't think the situation in the UK is really that very far away from becoming what it is in Greece/Bangkok.

Mark
Author:  adidan [ Thu May 13, 2010 10:52 am ]
Post subject:  Re: VAT 'will rise' under coalition government
I made my comments with memories of the previous Tory Government.

If there was no coalition I imagine there would just be a VAT rise without a softener of an increase in the personal allowance.

But yes, an increase to income tax would be better but then the LibDems didn't get a majority on their own so I couldn't see that happening.
Author:  Amnesia10 [ Thu May 13, 2010 11:35 am ]
Post subject:  Re: VAT 'will rise' under coalition government
Linux_User wrote:
VAT is an awful tax. They should increase income tax instead.

I was discussing this with my dad today, and we both thought that higher income taxes with the possibility of abolishing as many other taxes as possible, such as insurance tax and all the stealth taxes the Conservatives moaned about when they were in opposition.
Author:  okenobi [ Thu May 13, 2010 12:03 pm ]
Post subject:  Re: VAT 'will rise' under coalition government
We've all gotta pay for this [LIFTED] somehow. At least with a VAT increase, I can choose to cut down in certain areas. With income tax, I have no choice. Let it go innit.

As for this:

TheFrenchun wrote:
VAT rises... people buy less. Shop close, factory go out of business. More unemployed oh dear!


Whatever you cut, or increase tax on will have a similar effect. No need to be so melodramatic. I see bus loads of EU immigrants flower-picking and cleaning down here because Brits won't do it, because they're too comfy on benefits. They are wider issues here and we could on and on.

Fact is, we're in debt. Doesn't matter who's fault it is. We've all gotta chip in.
Author:  pcernie [ Thu May 13, 2010 12:16 pm ]
Post subject:  Re: VAT 'will rise' under coalition government
timark_uk wrote:
Amnesia10 wrote:
http://news.bbc.co.uk/1/hi/business/10112936.stm
VAT *is predicted* to rise …
Yet more sloppy journalism from the BBC.

Mark


+1, and it's really starting to bug me :(
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