Speculation: Drop in VAT to 15%

Tulipone

Tulipone

Suspended / Banned
Messages
3,111
Name
Chris
Edit My Images
Yes
Hopefully political debates are allowed here? Mods may close if sensitive.

I note that there is loads of speculation about a drop in the VAT rate to 15% in the pre Budget report this week. I am thinking 2.5% is not sufficient to make me rush out and buy anything that I was not going to - am I just an old grouch?

Will the drop in price really be actioned by retailers? Would it make you rush out and buy a D3? If not, how much does it need to drop to get you spending more?

Chris
 
I don't think it's going to make a huge difference, it'll bring the price of fuel down though (in theory) which should make everything else cheaper. Again though, this is fine in theory, but reducing the bank rates was meant to enable the banks to drop their lending rates, but so far all the have done is go :thumbs: and kept the extra money.

Personally 2.5% isn't going to make me go on a spending spree, even if it does filter through to retail pricing.
 
political debate is fine....... :)

member abuse in the name of politics is a :nono: though.

a drop in VAT will save me little on a day to day basis, but the rise to 19% as they claw it back is sure to hurt me
 
digitalfailure said:
but the rise to 19% as they claw it back is sure to hurt me
Click to expand...

True , you don't get owt for nowt.


although I would expect VAT to go upto 22% for twice as long as it's dropped to 15%, that's the way the goverment balances the books :bang:
 
DF will hav to pay 45% tax though, or so i read this morning anyway...

a cut in vat SHOULD filter through to retail, if it doesnt, thats very naughty of the retailer...
 
As to the question ... well it might possibly make me delay a purchase to coincide with 2.5% cut, but I wouldn't go out and spend more either.
 
There are several point with the VAT change, the biggest one being the change itself, how much will it cost the retail industry to reprice and repackage all the vat chargeable items.

Well that could be millions that the industry will have to get back somehow, and the only way they can do that is to increase prices, meaning little or no effect. This is where the American system of adding sales tax at the till is a far better idea.

Yes tax and vat will go up later to recoup the money + interest that the government is borrowing to fund this, but rest assured they'll not come down after the money has been clawed back.


My views on Brown can be seen on another thread, needless to say he has the financial brains of a five year old, actually that's not fair a five year old can add up.
 
Last edited by a moderator:
Another point made elsewhere is that 2.5% drop will not make people go out and spend. Many shop are cutting prices by 20% 30% 40% 50% and still people are not buying.
 
In the short term, the VAT rate cut might STOP people spending, in the same way that the possibilkity of Stamp Duty being abolished on houses didn't do the property market much good. IF I was about to spend some serious money on kit, I would wait for a while and see what happened WRT VAT and retail prices rather than spending my money now.
 
It's an odd situation Nod, here in Germany the VAT went up from 17.5% to frankly insane 19% nearly 2 years & the economy took a bit of a hit.

Despite that I have also the feeling that simply dropping it a little won't really get people buying. The fatc that on it's introduction it was around 2.5% doesn't help either.

In fact the last time German went on a short term spending frenzy was when the last increase was announced 2 months in advance.

Thus, in order to stimulate short term spending in the UK the Govt should announce an increase in VAT as from Jan the 1st 2009 then sit back & watch the population get a second mortgage on the kiddies iin order to save a few measly percent.

Or bring VAT down to the 2.5% level it was designed to exist at.
 
Hmm... does this means I should put some of my purchases on hold? Though I am skeptical of how retailers will reprice all their goods... or if they will even bother and just try and throw some incentives into the mix to balance it all out.
 
So VAT is cut by 2.5% but fuel duty will go up to offset this. Businesses can reclaim VAT, but not fuel duty. Fuel prices make a good chunk of other prices, so any decrease in VAT will be cancelled out, and food which is not subject to VAT will have to increase to pay for increased transport costs.

Gordon and Co maths skill strike again.
 
digitalfailure said:
a drop in VAT will save me little on a day to day basis, but the rise to 19% as they claw it back is sure to hurt me
Click to expand...


i agree, i cant see it making a vast difference and im also sceptical as to weather we need it, we;re only likely to be raped (as with interest rates from the bank) when the economy starts to recover as they increase VAT again as well as various other tax increases, which will surely hold the economy back futher for longer
 
whiteflyer said:
A saving of £213 on a £10000 purchase :lol:
Click to expand...

Is it really that much? I might be a bit (make that exceedingly) befuddled by painkillers and diazepam but isn't the vat on 10,000 spent around £1,500 and 2.5% off that around £40ish which means it sounds good but means next to nothing?
 
Last edited:
Flash In The Pan said:
I don't think it's going to make a huge difference, it'll bring the price of fuel down though (in theory) which should make everything else cheaper.
Click to expand...

It won't affect the price of fuel for business as they claim the VAT back anyway, it doesn't matter if you claim 17.5% or 15%.

I think this is grabbing at straws, £1000+ 17.5% = £1175 , £1000 + 15% = £1150 £25 saving on a TV for instance, I don't think that's going to set the High St on fire:shrug:
 
so lets see, we are in loads of **** because we (especially me) borrowed too much money and now found out we need to to pay it back.. so GB borrows loads more money and insists we all borrow some more too and spend it.

and he puts up car tax on old cars so that the value of them drops (mine dropped from £5k trade in value in may to £2200 trade in value in November). So I do what he wants and trade it in (at a massive loss) and buy a greener diesel. Then he decides he's not going to raise the price so much after all at the same time petrol prices drop like a stone and diesel hardly drops at all... Thanks Gordon, i have every faith in you and i'm sure you know what you are doing!!!
I dont want to vote conserative, but i damn well am going to just to get these jokers out.
 
It really is worrying just how much this country has changed in the last 10yrs, it really has gone massively down hill :(

I looked in to moving to Canada last year, and i might just take the research a bit more seriously now!
 
Matt. said:
It really is worrying just how much this country has changed in the last 10yrs, it really has gone massively down hill :(

I looked in to moving to Canada last year, and i might just take the research a bit more seriously now!
Click to expand...

Couldn't agree more, it certainly isn't the country I was born and brought up in. The country is in such a mess and I feel like going down on one knee and pleading with David Cameron to do his utmost to get these clowns out of power.
 
Matt. said:
It really is worrying just how much this country has changed in the last 10yrs, it really has gone massively down hill :(

I looked in to moving to Canada last year, and i might just take the research a bit more seriously now!
Click to expand...

Major big ditto there. The cost of living in the UK has risen dramatically over the past couple of years and especially over the last couple of months. I'm now able to afford less than when I first moved to the UK 7 years ago despite the fact that I'm earning twice as much now. I'm feeling sucked dry!
 
Last edited:
ekimeno said:
The cost of living in the UK has risen dramatically over the past couple of years and especially over the last couple of months.
Click to expand...

I've got to dissagree with that, though.. surely the cost of living has gone down in the last two months.. in fact thats the silver lining in the cloud so far
 
Well, groceries still cost me the same and my rent has gone up. Camera and music gear and all my cycling equipment has also gone through the roof recently. Also, my company announced a reduction in salary increases for the new year - strikes me as cost of living - going up. I'm not in the house-buying game and I'm also debt free as I don't use any credit. Seems this country is stacking against people who choose to save for what they want and not be in debt.
 
Last edited:
badgerbaiter said:
Then he decides he's not going to raise the price so much after all at the same time petrol prices drop like a stone and diesel hardly drops at all... Thanks Gordon, i have every faith in you and i'm sure you know what you are doing!!!
Click to expand...


did they can the new tax system?

edit: found it, thank **** for that, ill get another 18months tax nearly before i get raped, which should tie in with me trading my car in for a rickshaw anyway
 
Last edited:
whitewash said:
did they can the new tax system?

edit: found it, thank **** for that, ill get another 18months tax nearly before i get raped, which should tie in with me trading my car in for a rickshaw anyway
Click to expand...

kind of

they certainly kept it quiet today anyway.

if petrol gets down to 80p a litre im dumping the diesel and getting a V8 chevy day van :)
 
Kerioak said:
Is it really that much? I might be a bit (make that exceedingly) befuddled by painkillers and diazepam but isn't the vat on 10,000 spent around £1,500 and 2.5% off that around £40ish which means it sounds good but means next to nothing?
Click to expand...

I'm afraid those painkiller are working on your brain too. :lol: you have just taken 2.5% of the vat payable and that not right it's 2.5% less vat on the item price.

£8510.56 + 17.5% vat = £10,000.01
£8510.56 + 15% vat = £9787.25

A saving of £212.76
 
Last edited by a moderator:
badgerbaiter said:
kind of

they certainly kept it quiet today anyway.

if petrol gets down to 80p a litre im dumping the diesel and getting a V8 chevy day van :)
Click to expand...

Don't forget he put 2.5% on fuel duty today, which he will NOT take off when VAT goes back up 31/12/2009
 
You must log in or register to reply here.
Back
Top