Tax Cuts

[KungFooBob]

I've heard a rumor that the Chancellor is going to announce a cut to VAT on Wednesday, so what do we reckon, back to 17.5 or 15%?

[G.P]

Really? If there is a cut, i reckon its only as a pre-cursor to a bigger rise in income tax.

I see the Germans reduced VAT from 19% to 16% and there is talk of us following suit.

[MrLongbeard]

I've heard a rumor that the Chancellor is going to announce a cut to VAT on Wednesday, so what do we reckon, back to 17.5 or 15%?

I didn't actually realise is wasn't 17.5%, it went up to 20% in 2011 according to Google I'm a bit behind the times it would seem

[KungFooBob]

I suspect it won't be done to reduce costs for consumers.

Businesses will be expected to charge the same, but pocket the difference, to make up for the whole COVID thing.

However once consumers get word of it they'll be expecting stuff 'cheaper'.

[G.P]

I suspect it won't be done to reduce costs for consumers.

Businesses will be expected to charge the same, but pocket the difference, to make up for the whole COVID thing.

However once consumers get word of it they'll be expecting stuff 'cheaper'.

Yep, consumers will expect to see the difference. The only difference it will make to my business is that I charge less and claim less.

[1913]

Yes, that will certainly make me want to buy some £100.00 thing I don't really need to save £5.00.

[Jody]

Really? If there is a cut, i reckon its only as a pre-cursor to a bigger rise in income tax.

I see the Germans reduced VAT from 19% to 16% and there is talk of us following suit.

If they do reduce it, it'll be the same BS as last time.

Reduce the rate to encourage spending, wait a couple years, put the rate up higher than it was before.

22.5% VAT by 2022

[rusty]

VAT reductions are pointless.
They cost a huge amount in tax income and only really benefit the well off. Low income households generally have higher percentage spends on none VAT rated items so don't see any benefit.

When they had the drop in VAT back in 2010-ish, we bought two cars and a house and the difference to us was barely even noticeable.

[Mr Moofo]

Maybe it will counteract the Covid increase that supermarkets, other retailers and Amazon have decide to introduce.
Perhaps they would also like to return to competitive pricing?

[Lutin]

VAT reductions are pointless. They cost a huge amount in tax income and only really benefit the well off.

And you think the tories care about that?

Bozo's already kicked all the minimum wage earning carers in the head this week with his ill informed and quite obviously ignorant comments. So why not make life for the the better off just a little bit easier as well?

[Mr Moofo]

VAT reductions are pointless. They cost a huge amount in tax income and only really benefit the well off.

And you think the tories care about that?

Bozo's already kicked all the minimum wage earning carers in the head this week with his ill informed and quite obviously ignorant comments. So why not make life for the the better off just a little bit easier as well?

I thought his comments were about the managers and owners of these places ? - remember they have been charge up to 1.6k a week ... so if privately owned , who was responsible for PPE?

[MrLongbeard]

Well he's chucking another £9 billion* into the pot right now.

*Obvs won't be the full whack, but it'll be more than chump change

[KungFooBob]

"He told MPs he will cut VAT on food, accommodation and attractions from 20% to 5% from next Wednesday"

Well I was close.

[wheelnut]

VAT reductions are pointless.
They cost a huge amount in tax income and only really benefit the well off. Low income households generally have higher percentage spends on none VAT rated items so don't see any benefit.

When they had the drop in VAT back in 2010-ish, we bought two cars and a house and the difference to us was barely even noticeable.

That’s exactly why there was a vat cut back then. You bought two cars. That helped keep the car manufacturers and their supply chain employing people. The vat cut gave you the impetus to do that.

A healthy economy isn’t about helping the less well off, or the more well off. It’s about keeping a pound coin moving from one place to another. An economy is psychological, it’s about having the confidence to spend. The amount of money in the system doesn’t change (QE excepted) it’s when it stops moving that the issues start.

[wheelnut]

Well he's chucking another £9 billion* into the pot right now.

*Obvs won't be the full whack, but it'll be more than chump change

There’s some clever bits in there. The 1k if you keep employees that returned from furlough til January is a clever move. I think it’s aimed squarely at retailers as an encouragement to keep employees past xmas. If it’s good xmas it might settle a few retailers nerves.

[Tomcat]

There’s some clever bits in there. The 1k if you keep employees that returned from furlough til January is a clever move. I think it’s aimed squarely at retailers as an encouragement to keep employees past xmas. If it’s good xmas it might settle a few retailers nerves.

That bit in particular is utterly useless. It's a headline grabbing sound bite that will achieve precisely nothing. If you don't need an employee because you don't have to work to give them, the govt giving you a couple of weeks wages for them will tide you by for, let's see, about 2 weeks. And if you do have the work for them and you're going to keep them on anyway you've just received a totally unnecessary bung of a grand out of the taxpayer's pockets.

As for the rest.... you've lost your job, you can't pay your bills, you're scared for the virus, your future and your children, but the govt is letting you have 50% off in restaurants. Righto.

[weeksy]

There’s some clever bits in there. The 1k if you keep employees that returned from furlough til January is a clever move. I think it’s aimed squarely at retailers as an encouragement to keep employees past xmas. If it’s good xmas it might settle a few retailers nerves.

That bit in particular is utterly useless. It's a headline grabbing sound bite that will achieve precisely nothing. If you don't need an employee because you don't have to work to give them, the govt giving you a couple of weeks wages for them will tide you by for, let's see, about 2 weeks. And if you do have the work for them and you're going to keep them on anyway you've just received a totally unnecessary bung of a grand out of the taxpayer's pockets.

As for the rest.... you've lost your job, you can't pay your bills, you're scared for the virus, your future and your children, but the govt is letting you have 50% off in restaurants. Righto.

Assuming you were in power, what would you do instead and how would you fund it ?

[Couchy]

There’s some clever bits in there. The 1k if you keep employees that returned from furlough til January is a clever move. I think it’s aimed squarely at retailers as an encouragement to keep employees past xmas. If it’s good xmas it might settle a few retailers nerves.

That bit in particular is utterly useless. It's a headline grabbing sound bite that will achieve precisely nothing. If you don't need an employee because you don't have to work to give them, the govt giving you a couple of weeks wages for them will tide you by for, let's see, about 2 weeks. And if you do have the work for them and you're going to keep them on anyway you've just received a totally unnecessary bung of a grand out of the taxpayer's pockets.

As for the rest.... you've lost your job, you can't pay your bills, you're scared for the virus, your future and your children, but the govt is letting you have 50% off in restaurants. Righto.

Exactly this, as an employer if the work is there the employee stays. If there is no work they are gone as £1000 makes no difference. We’ll keep those on furlough till the end of the scheme and let any work build up. A week from the end they’ll be taken off furlough and there should be enough work till January when we get the bonus. After that who knows.
They have to do something but they also have to accept there’s big job losses coming in industries that need people to spend money and where social distancing stops them.
The meal voucher is another joke, it’s not the cost of a meal stopping me going it’s the risk and £10 isn’t going to make me ignore that risk.
As for the VAT cut that’s similar but as with all VAT cuts they benefit those with cash more, lower earners and those on benefits buy more things that are VAT free anyway compared to higher earners.

I don’t envy the chancellors job and tbh he’s the only Tory I think has anything about him but there little he can really do to help

[gremlin]

Given that my in-laws moved in to mine (again) yesterday, I really am quite chuffed at the stamp duty holiday as it might mean they move out quicker.

[wheelnut]

There’s some clever bits in there. The 1k if you keep employees that returned from furlough til January is a clever move. I think it’s aimed squarely at retailers as an encouragement to keep employees past xmas. If it’s good xmas it might settle a few retailers nerves.

That bit in particular is utterly useless. It's a headline grabbing sound bite that will achieve precisely nothing. If you don't need an employee because you don't have to work to give them, the govt giving you a couple of weeks wages for them will tide you by for, let's see, about 2 weeks. And if you do have the work for them and you're going to keep them on anyway you've just received a totally unnecessary bung of a grand out of the taxpayer's pockets.

As for the rest.... you've lost your job, you can't pay your bills, you're scared for the virus, your future and your children, but the govt is letting you have 50% off in restaurants. Righto.

It's not, it's a not a panacea but it's not as black white and white as you think it is. You've got a shop and employ, say 20 staff on a mix of full time and part time. These are staff that you like and work well together. You've had them all on furlough at various times and they're coming back in dribs and drabs. You know furlough finishes in october and are worried about a quiet run up to xmas. That 20k may just make the difference between taking a chance and hanging on to good team, seeing how xmas goes and getting rid of them.