Would a temporary VAT reduction boost the economy?

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So I was thinking about VAT and the wonderful days of 15% - O how we moaned and then it all went worse, then much worse.

I wonder what would you buy IF VAT was dropped for say 3 months to 15% as an incentive to the consumer.

Would it work? :thumbs::thumbsdown:
 
for such a short period i don't think it will work at all as well as all the extra work to put it in place i do think it just wouldn't be worth it.
 
Didn't really work in 2009 :thinking:
 
viv1969 said:
Didn't really work in 2009 :thinking:
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Exactly - many retailers made pricing adjustments so they profited, but the overall effect was completely negligible, and amounted to nothing more than the Gov being seen to be doing something.

C'ést plus ça change!
 
Nope. Wouldn't make a jot of difference. Dropping vat off fuel altogether would. Fuel isn't a luxury so it shouldn't have any vat, ditto electricity and gas.
 
I doubt it. From a personal perspective, I have no spare money at all these days. It's not that I can't afford things because they are 5% too expensive. :lol:
 
Gr8Shot said:
what about lower income tax to 15% & 30%
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If you think the cuts are bad now, I hate to think what it would be like if the Government had such a reduction in revenues!
 
I would prefer to see a income tax holiday, or better still a rebate of a month, via giro through the door.
 
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it was introduced at 10% and reduced to 8% a year later with luxury goods at 12.5% but then it was hiked up to 25% and then reduced to 12.5% some years later

in 1979 it was upped to 15% from 8% and the luxury rate was scrapped
 
MarcM said:
If you think the cuts are bad now, I hate to think what it would be like if the Government had such a reduction in revenues!
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but their cuts/osterity measures still mean we are borrowing more every year; so it just doesn't make sense to me.....

Something has to be done and stop putting bloody fuel up, costs me a small fortune to get to work as it is....
 
Gr8Shot said:
but their cuts/osterity measures still mean we are borrowing more every year; so it just doesn't make sense to me.....

Something has to be done and stop putting bloody fuel up, costs me a small fortune to get to work as it is....
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could you do something yourself to help your fuel costs? smaller car for example?
 
joescrivens said:
could you do something yourself to help your fuel costs? smaller car for example?
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i drive a 1.2 corsa so no
and cycle when i can manage it in summer, but its a 26 mile round trip up and down hills snd i get bloomin knackered..
 
Johnd2000 said:
It took us out of recession before the election.
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It didn't take us out of recession. It raised the figures temporarily, but never for a long enough length of time to be officially classed as out of recession.
 
Gr8Shot said:
but their cuts/osterity measures still mean we are borrowing more every year; so it just doesn't make sense to me.
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Who are we borrowing from and what would happen if we decided we weren't going to pay it back?!!!


Steve.
 
Austerity. Sorry, I tried not to, but there it is. I'll get my coat.
 
Can't imagine it making any difference at present, and I wouldn't think for a moment current incumbents would be forthcoming offering to pass on a reduction in VAT for anyone!
 
viv1969 said:
It didn't take us out of recession. It raised the figures temporarily, but never for a long enough length of time to be officially classed as out of recession.
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GDP grew as a whole in 2010, didn't it? I thought the rule on recessions was 2 quarters to start one, 1 qtr to end it.
 
back in 09 when it was cut from 17.5% to 15% for a year.. it made little or no difference..... save £25 when spending £1000... woohoo.... (whilst knowing the savings would be recouped when inc to 20%).... now had vat been scrapped for say December, that would have got the money moving..
 
maybe if we stopped the money leaving the country by allowing foreign workers to send it home, it would get spent here and thus boost the economy....
 
Gr8Shot said:
maybe if we stopped the money leaving the country by allowing foreign workers to send it home, it would get spent here and thus boost the economy....
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Very true, I wound like to see some figures as to how much this economy has lost due to this problem.
 
Gr8Shot said:
maybe if we stopped the money leaving the country by allowing foreign workers to send it home, it would get spent here and thus boost the economy....
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scott199 said:
Very true, I wound like to see some figures as to how much this economy has lost due to this problem.
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Google is your friend if you want to look these things up.

http://migrationobservatory.ox.ac.uk/briefings/migrant-remittances-and-uk

World Bank data suggest that the UK is a net remittance-receiver: inflows of remittances are higher than outflows

The UK is a receiver as well as a sender of remittances. As shown in Figure 1, the World Bank estimates suggest that since the mid-1990s the UK has been a net-remittance receiver. The main countries from which remittances are sent to the UK include Australia, the United States and Canada (World Bank 2010). Real remittance inflows (inflation adjusted) for the UK have increased by an annual average of 6% since 1989, reaching close to GBP 4,647 million in 2009. However, these inflows represent a small share of the UK GDP (about 0.3% in 2009). The UK occupies the fourteenth place in the world in value of remittances received and the sixth place in Europe.
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But of course, it's all the immigrants fault :thinking:
 
on a big purchase of say a £10k car (chosen because its a well thought through high cost purchase)

vat @20% makes the vehicle £12k..
vat @15% makes the vehicle £11.5k

I'm not convinced £500 is going to affect the purchase decision enough to make enough people start flashing the cash to kick the economy into life in the way we would hope especially when some dealerships are currently offering to discount the car by 20% to give the effect of vat free so on these deals the vat rate is fairly irrelevant anyway
 
TriggerHappy said:
Google is your friend if you want to look these things up.

http://migrationobservatory.ox.ac.uk/briefings/migrant-remittances-and-uk



But of course, it's all the immigrants fault :thinking:
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There is considerable uncertainty about the value of remittances to and from the UK. Since the end of foreign exchange controls in 1979, there is no official mechanism for recording remittances.

Not saying its all anyone's fault I'm saying that we need to start looking at all ways to save money and not just austerity measures, money leaving the country being one of them...
 
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