VAT increase and related rambling

[Odie]

Well VAT goes up on january 1st, and ive started to receive letters from various companies reminding me that my direct debits and bills will be going up BUT I cant remember any of them ever going down (might just be my memory failing me).

So effectively from the 1st its going too cost me an extra 2.5% to live, im struggling with money as it is.. (and have not had a pay rise in 2 years [cost of living increase])

I just wondered what people thoughts are on the VAT change now thats its coming to an end?

I personally feel conned by the government and by retailers/industry, I dont fully understand the situation with the economy and how it all works from my common sense feel of the situation I dont actually understand where the money has gone/is going.

Also the interest rate was reduced when will this be going back up? can I also expect to be "stung" for this? When interest rates went down the rent on my flat never went down (whether it should have or not i dont know) but is it likely to go up when interest rates do?

[sidicks]

Odie said:

Well VAT goes up on january 1st, and ive started to receive letters from various companies reminding me that my direct debits and bills will be going up BUT I cant remember any of them ever going down (might just be my memory failing me).

Utility bills would have been adjusted automatically, I would have thought.

Odie said:

So effectively from the 1st its going too cost me an extra 2.5% to live, im struggling with money as it is.. (and have not had a pay rise in 2 years [cost of living increase])

Not necessarily as not everything is Vat-rated

Odie said:

I dont actually understand where the money has gone/is going.

Nor do Gordon brown or Alistair Darling, that's the main problem...

Odie said:

Also the interest rate was reduced when will this be going back up? can I also expect to be "stung" for this? When interest rates went down the rent on my flat never went down (whether it should have or not i dont know) but is it likely to go up when interest rates do?

This shouldn't affect your rent, but will affect variable rate mortgages.

Sidicks

[richardxjr]

We've got just about the lowest rate of vat in the EU. If it wasn't for the election looming it would be up to 20%, which is where it will go shortly after the election whoever's in charge imo.

I'd like to see it at 50% or whatever would be necessary to do away with tax on earnings altogether. One tax, based on what you spend not what you earn.
Sky, Stella, Lambert & Butler & sportswear are all vatable I think.

Edited by richardxjr on Friday 11th December 12:51

[anonymous-user]

I think you'd need more than a 50% rate to do that & all that would do is ruin the country even more. No one would buy ANYTHING in the UK, it would be cheaper to import.

[hornetrider]

Dave_ST220 said:

I think you'd need more than a 50% rate to do that & all that would do is ruin the country even more. No one would buy ANYTHING in the UK, it would be cheaper to import.

Well no, because a parallel measure in that instance would be to ramp up imort duty.

[Jalopnik]

Dave_ST220 said:

I think you'd need more than a 50% rate to do that & all that would do is ruin the country even more. No one would buy ANYTHING in the UK, it would be cheaper to import.

I might be completely wrong here but I've always thought that you paid VAT on purchases no matter what county they originated from.

[richardxjr]

Jalopnik said:

Dave_ST220 said:

I think you'd need more than a 50% rate to do that & all that would do is ruin the country even more. No one would buy ANYTHING in the UK, it would be cheaper to import.

I might be completely wrong here but I've always thought that you paid VAT on purchases no matter what county they originated from.

Within the EU you pay the VAT rate applicable in the country you are ordering from. There's no import duty (yet). Outside the EU you pay the VAT at our rate upon import (plus import duty, and VAT on the import duty too I think)

Obviously if we were out of the EU we could do what the hell we needed to.

[Odie]

sidicks said:

Odie said:

Well VAT goes up on january 1st, and ive started to receive letters from various companies reminding me that my direct debits and bills will be going up BUT I cant remember any of them ever going down (might just be my memory failing me).

Utility bills would have been adjusted automatically, I would have thought.

Odie said:

So effectively from the 1st its going too cost me an extra 2.5% to live, im struggling with money as it is.. (and have not had a pay rise in 2 years [cost of living increase])

Not necessarily as not everything is Vat-rated

Odie said:

I dont actually understand where the money has gone/is going.

Nor do Gordon brown or Alistair Darling, that's the main problem...

Odie said:

Also the interest rate was reduced when will this be going back up? can I also expect to be "stung" for this? When interest rates went down the rent on my flat never went down (whether it should have or not i dont know) but is it likely to go up when interest rates do?

This shouldn't affect your rent, but will affect variable rate mortgages.

Sidicks

Well on the first point here is an example - Contact lenses, i pay for them by direct debit for the last 3-4 years ive been paying £25 a month, they never went down when the vat changed. Likewise with my mobile phone contract it was £35 a month and never changed when vat went down, ive recently changed contract so am paying £35 a month but have just been notified that it going up because of the vat change.

Second point - I am aware of this but really how many things does a single man living on his own buy that doesnt have vat, coffee, milk, books.

Third point - Worrying

Fourth point - It is quite resonable to make a guess that if the people who I rent off have a morgage on the flat im in that if the morgage goes up then this additional cost will be passed on to me the tenant.

[JonRB]

anonymous said:

[redacted]

Most retailers were already discounting by way more than 2.5% to try and stimulate sales. And even so, I saw a big deal being made that you were getting the reduction. Marks & Spencers got away with at-till reductions for the whole time but I know a lot of retailers had to re-price stock. And most web-based sellers just applied the new VAT rate leading to items having prices ending in pence values other than .99 for once.

The whole VAT-reduction thing was a mere piss in the ocean anyway. It cost retailers £millions to implement the changes, the Revenue lost £millions in income, nobody was that much better off, and I very much doubt it stimulated the economy that much either (although may have encouraged some dullards to think they were saving some money when purchasing).

I think reverting will be easier, as price rises can be brought in gradually - a retailer can choose not to put their VAT-inclusive price up and simply reduce their margin. When the VAT rate was reduced consumers expected all prices to go down immediately. I would imagine few consumers are going to object that prices don't go back up immediately.

Edited by JonRB on Friday 11th December 13:58

[anonymous-user]

Jalopnik said:

Dave_ST220 said:

I think you'd need more than a 50% rate to do that & all that would do is ruin the country even more. No one would buy ANYTHING in the UK, it would be cheaper to import.

I might be completely wrong here but I've always thought that you paid VAT on purchases no matter what county they originated from.

You do, but as has been stated at the rate of the country you are buying from. people are moaning about a pokey VAT increase??!! You may want to check what else they have in store for you.

[Oakey]

Is it going back up to 17.5%?

The reason I ask is that I tried to send an Xbox 360 back to Microsoft for repair yesterday and as it's out of warranty this has to be paid for. The VAT on their bill was 19% for some reason?

[plasticpig]

Oakey said:

Is it going back up to 17.5%?

The reason I ask is that I tried to send an Xbox 360 back to Microsoft for repair yesterday and as it's out of warranty this has to be paid for. The VAT on their bill was 19% for some reason?

Probably because your Xbox will be repaired in Prague. The Czech Republic VAT rate is 19%.

[Bing o]

Odie said:

Likewise with my mobile phone contract it was £35 a month and never changed when vat went down, ive recently changed contract so am paying £35 a month but have just been notified that it going up because of the vat change.

Are you sure about that because VAT is itemised on your phone bill?

[Oakey]

plasticpig said:

Oakey said:

Is it going back up to 17.5%?

The reason I ask is that I tried to send an Xbox 360 back to Microsoft for repair yesterday and as it's out of warranty this has to be paid for. The VAT on their bill was 19% for some reason?

Probably because your Xbox will be repaired in Prague. The Czech Republic VAT rate is 19%.

Cheeky fkers.

[mcdjl]

I'd ike to think that this is because they're being nice...I know that all of my £20 phone/internet bills have been reduced to £19.57 with out them telling me so they're probably trying to pre-empt the inevitable moan when they do go back to £20.

[Mclovin]

prices will go up a lot higher than they came down thats for sure....this has to be in the top ten of their f**k ups....

[king arthur]

I think you can pretty much bank on it going to 20% at some point in the next term of government. I find that more palatable than other forms of tax rise as it is to some extent one you can avoid.