VAT rise to 20% is Permanent Say's Cameron!

  Uboat 14:47 09 Jan 2011

SO more of us will struggle on a Permanent basis then! god help small businesses! in fact god help us all...

click here

  uk-wizard 14:55 09 Jan 2011

I can remerber when purchase tax was 33% so VAT has a way to go yet.

  uk-wizard 14:56 09 Jan 2011

remember even

  Forum Editor 15:05 09 Jan 2011

on a Permanent basis then! god help small businesses! in fact god help us all..."

We're not going to war, it's just a VAT increase. There are around 15 European countries where the VAT rate is as high, or even higher than ours. In Norway it's at 25%, and when I was last there I didn't see piles of bodies in the streets, and no goods in the shops.

We'll survive, and even prosper if we can just get out of this British habit of always seeing our glass as being half full. A bit of optimism can work wonders.

  Fruit Bat /\0/\ 15:20 09 Jan 2011

Taxes come from politician's hot air -
so they are bound to rise.

  carver 16:07 09 Jan 2011

I might be wrong and I'm sure you will tell me if I am but isn't Norway ranked about number 3 in standard of living were as we are ranked about 18 from the top.

VAT rises hit the poorest the hardest every time, a bigger percentage of their money goes on basic items compared to some one on even 50 percent tax.

But I suppose that we are all in it together and we all have to tighten our belts, apart from bankers who need the extra money to buy bigger trousers.

Or as Shadow Chancellor Alan Johnson told Sky News: "I now hear the prime minister has said, whereas the 50% tax rate for the richest in our society would not be permanent, the VAT increase would.

  Marko797 16:14 09 Jan 2011

from an expected corner.

This is all very ironic. When VAT was *reduced* by the same percent (2.5) under Labour (no I don't vote Labour by the way), on a temporary basis, people poo-pooed it as being an insignificant lowly reduction which was a waste of time, and would not assist at all financially.

Now that it has increased, by the same 2.5%, some quarters are now outraged, and start to predict mass financial suffering. Mind-boggling!

Get your calculators out and see what the real effect of this actually is. Last official figures quoted advised we would be some £7 *per week* worse off. Hardly cause for rebellion or public outrage when compared to other EU state VAT levels.

Or perhaps there was an alternative tax increase which you would have preferred?

In fact, as an aside, there are some small businesses and freelancers who will gain from the VAT increase.

  birdface 16:33 09 Jan 2011

[£7 *per week* worse off.]
Or only £364 a year whichever way you look at it.
Maybe you can afford but that would cover my winter gas and electric bills.
Not unless they are thinking of giving us pensioners a rise to cover it which I would doubt.
So obviously you can afford it but think of the less well off that will struggle.
There is also the loss of jobs because of the Vat increase it is a known fact that people buy less and businesses that are struggling just now will go bust and the employees are on the dole.
Then the Interest rates start going up and mortgages get more expensive and houses are repossessed,
When Thatcher was in Government the interest rate went up to 15% if it gets anything near half of that there will be hundreds of thousands of houses being repossessed.
So far all of the ones that don't mind seem to be working.Anybody not working think the same.

  Marko797 16:35 09 Jan 2011

surely you mean 'half empty' as opposed to 'half full'?

  Marko797 16:40 09 Jan 2011

I do not think that a 2.5% VAT increase will impact on businesses in the way which you describe. A recession maybe, which is a cause of businesses going bust (and there have been many) but not a 2.5% VAT increase.

  spuds 16:53 09 Jan 2011

I think that this time next year, the extra vat will be absorbed into the items price, and as such, very little long term difference will occur.

Perhaps one thing to look out for is the inevitable rounding off of figures, like previous vat increases. Always seems to make the item that little bit more expense, excluding the vat increase?.

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