Cut in VAT

  carver 08:38 24 Nov 2008
Locked

The rumour has it that VAT is to be cut by 2%, so who is going to bail the economy out and rush out to buy all new products, fancy all new 42" LCD TVs for the house, I'll have 3, fridge is 6 years old, buy a new one.

Want a new car, save yourself about £500 on the price of a new Jag, only problem is, no body wants to give me any thing for my 4 year old car.

I don't think that these things are really my priority at the moment, it's more like the increase in food, gas and electric prices.

So if it happens who will rush out to buy all new products.

  Stuartli 08:44 24 Nov 2008

The figure being mentioned is a 2.5 per cent cut in VAT.

Frankly I don't think it will make the slightest difference to most people - goods and services will still seem to cost pretty much the same.

Put it this way - if you buy something for £10 plus VAT it costs £11.75.

Would a new price of £11.50 really sway the buying decision?

  Al94 08:47 24 Nov 2008

and will the retailers reduce their price tickets?

  interzone55 08:51 24 Nov 2008

Funny you mention a fridge.

I need a new one so I was browsing in Currys yesterday and saw a nice Bosch one @ £319.99, I worked out the price with a drop in VAT and I'd save a grand total of £6.81, I don't think I'll wait for the VAT drop.

Also interesting to note that the British Retail Consortium want notice of the VAT drop so they can get new POS and price tickets printed.
Interesting that there was no such notice when VAT went up to pay for the cock-up with ERM...

  wiz-king 09:06 24 Nov 2008

I remember when purchase tax on 'white goods' was around 30%. I dont think that changing the VAT rate will make that much difference.

  anchor 10:27 24 Nov 2008

This shows the difference a drop in VAT "might" make, (if retailers pass it on!):

click here

  dagnammit 11:03 24 Nov 2008

We won't see it.

Business will swallow it up.

How about he gives me back what he took in his Income Tax changes.

  GANDALF <|:-)> 13:14 24 Nov 2008

The Government are obviously clutching at straws. They (and the rest of the planet) are in a massive hole because the infra-structure of our economy was based on leverage, credit, borrowing and assumed wealth from the perceived increase in value of homes,land and commercial property rather than on manufacturing output.

A couple of months ago Brown was being hailed as the master strategist for bailing out the banks...call me stupid and naive but he had only 2 choices, bail 'em out or let go belly up, sooner rather than later. These are not the structured, planned paths of a major strategist and a cynical person would say that he had no choice but to bail the banks out which is hardly stirring stuff. The Government and the banks never saw this coming in spite of warnings about business and personal borrowings, so they are hardly the best crew to get us out of this mess which will need some dedicated 'thinking out of the box'

The answers to this mess are well camouflaged and I feel that whatever the Government does will not change things for s few years. The other problem is that brown and his merry men are scared to death of supporters legging it to teh Conservatives and they will not implement any draconian measures which are the only ones that can work. However a lot of people will not like the alternatives as they will require a radical rethink on consumerism and aspirational aims.

G

  oresome 13:25 24 Nov 2008

If take alan14's fridge as an example, will we ever see it with a ticket price of £313.18?

I doubt it. Large ticket items are priced to the nearest £5 or £10 less a penny.

People will only spend when they feel secure in their employment or income source.

  lofty29 13:44 24 Nov 2008

It is obvious that the "leaks" are purely headline grabbing, the government has got this country in a total mess, and they don't know which way to turn, all is certain is that in a few years time whatever party is in power the vast majority of people are going to be clobbered.

  Switcher 15:21 24 Nov 2008

The only benefit we "the public" will derive from any cut in VAT will be the knowledge that the thieving business men will be able to steal less from the public and the government.

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