VAT reduction of 2.5 percentage points

Will it make any difference?

  • Darling's reduction in VAT will really energise my business/ motivate me me to go out and spend more

    Votes: 2 3.9%
  • The reduction in VAT will make very little difference to my business/ my spending plans.

    Votes: 49 96.1%

  • Total voters
    51
  • Poll closed .
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What do you think of the Chancellor's ideas for rescuing the economy?
 
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Make little difference. 2.5% off VAT is worth £22 in the grand.

What will it cost to alter everything to the new temporary rate?
 
Yeah great Pre-Budget! :rolleyes:

Darling says... "I shall reduce VAT by 2.5%."

The rest of the house and Britain say "Hurray!"

Darling goes on... "Oh and errrm... I shall be:

Raising duty on Petrol.
Phasing in an increase in vehicle excise duty.
Raising All National Insurance by 0.5% from 2011.
Public spending growth will be cut to 1.2%.
Obviously I'll also be raising duty on Alcohol.
Oh and raising duty on Tobacco too.

I believe that will sort things out in the economy".

We say, :rolleyes: :rolleyes: :rolleyes:
 
dont worry, this is the government that promised an end to boom and bust, and has had 11 years to sort things out.
 
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As usual with these goons it will take a few days to find whats behind the headline givaways and the usual fkups like the 10p reduction .

'm only a sole trader decci and done ok for last 24 yrs. But! this is the first time I lost a job to a redundant Banker :mad: Another job I have been told they can't have it done just yet, as their sons family have come to live with them :eek:

The last correction was bad but this looks like getting nasty. The work being done just now is pre booked with little work coming in.. Hope we don't see riots to get food from supermarkets... Hope im totally wrong...

Chin up :LOL: :LOL: :LOL: :LOL:
 
One of the problems is this: If you are a VAT registered business, you could previously claim back 17.5% VAT on fuel. But since cutting VAT, but raising fuel duty to ensure the price of petrol/diesel doesn't fall, you can now only claim back 15% of the exact same price. How the hell this helps small business, I'll never know. Also in 13 months time, when the VAT goes back up, the extra fuel duty will remain.

Plus, every retail business now has to spend a fortune changing prices/adverts/menus etc. to reflect the change in VAT. Then in 13 months time, they then have to do it all over again to swap it back to 17.5%.

What a joke. :rolleyes:
 
I work 99% business 2 business. This will increase my costs due to my accounts needing to spend time effort changing everything over.I get charged VAT and anything I buy or sell then I send the difference to the chancellor. In effect I am an unpaid tax collector who sees no benefit in this tax or it's reduction.

Also we travel 40k each so again this will increase my outlay. At a personal level food is one of my biggest weekly spend -most is vat free.

I look forward to gas and electricity going down but that's v. small crumbs.

Cheers

Richard
 
After yesterday's announcements i'm more than slightly concerned that these people are running our country and in particular, running our economy. Reducing VAT by such a small amount will not make people go out and spend more money, to do that they should have lowered income tax, even if only for the same 13 month period, so that people go home at the end of the week/month with more money on their pockets. That will make people think they have more money and therefore encourage them to go out and spend it. The difference the VAT cut will make is negligiable. One of my biggest monthly 'spends' is fuel and so knocking off 2.5% VAT and adding 2p in duty will make no diffference there. I think they may have finally nailed the lid down on the Labour reign - why doesn't Brown call an election and put an end to his suffering - its only a matter of time now surely?

I was going to suggest to my gaffa that we change our advert in the local paper to try and drum up a bit of extra work by advertising the fact that people will save money on our fees during the lowered VAT period. The average cost of us getting planning permission for someone would be in the region of £1500 so the current VAT reduction would save the client £37.50!! Not worth the effort of changing the advert!
 
Plus few shops are going to go to the expense of re pricing anything, just another expense that would probably outweigh the savings.

Also, if you have 2+ million unemployed, then they are really not in a position to spend anything, even if you completely abolished VAT.
 
The problem is that, under EU law, the minimum level for VAT is 15%. Of course, they could make more/all things VAT-exempt, which would get around that, but hell is not showing any signs of a temperature drop just yet.

The problem is a self-fullfilling prophecy: the banks won't lend amongst themselves, so the LIBOR rate is still up, which makes mortgages more difficult to obtain, means people can't move, prices drop, lenders become more reluctant to lend, prices drop further, increased reluctance to lend, prices drop still further....and in amongst all that, banks see our assets/collateral values dimishing, won't lend amongst themselves, LIBOR rate stays high...and around we go again...
 
I don't see the logic in blaming LIBOR.

The banks would rather not lend money to other banks, as they don't trust them, so they offer to lend only at highish rates with a loading to cover the perceived risk They can borrow money at lower rates from the BoE, so they have no desire to borrow at higher rates from each other.

House prices are driven mostly by confidence, so if people think they will go down, they go down. just as over the last 20 years people thought they would go up, so they went up.

You can get a mortgage now if you have a reasonable deposit, and you are borrowing a reasonable proportion of the purchase price, and you can afford the repayments.

This may be a bit of a shock for some people...

...but who will say it is wrong and the previous "chucking money around like a drunken sailor" method was right?
 
That's the whole point - if lenders had kept to a sensible proportion of the perceived value, rather than 100% (or 125% in the case of Northern Wreck), then they wouldn't have put themselves at risk to people defaulting and then not getting their money back. Whether it's been borrowed at BoE or LIBOR rates is immaterial.

Don't forget that a lot of people went into property (hence driving up prices), precisely because big Gordy had raided the pension funds and played havoc with eventual monies due on retirement.
 
This inter-bank lending thing is a load of rubbish. What they really mean is that all Brit banks want to BORROW but the East and Middle East banks that have the dosh see them as a high risk so won't come to the party.

It's the day of reckoning that the West has had coming to it for years. We manufacture nothing but buy everything - with money loaned by the country providing the goods. It's just like a shopper using a store card promising to pay later.

The wheels have fallen off the little red wagon and will never be put back on again.

Oh and as far as the borrowing for houses goes. The FSA should have instructed all bank to limit loans to 3 times salary. This would have put an effective cap on house prices.
 
better tell germany that then. they are a bigger exporter than china.
 
I've just benfited by about the price of a pint. I got 2.5% knocked of a previous quote for a couple sealed glazing units. ~Whoopee~. I think I'll save it up and have the best Christmas ever
 
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