VAT reduction...clueless?

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clivex

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Again Brown does the right thing in the wrong way

First of all, he buys huge stakeholdings in banks and doesnt attach the required strings (ie you WILL pass on rate cuts imemdiately, your staff WILL NOT get a bonus from taxpayers money). I would have demanded heavy staff cuts and "restructuring" at the banks too.

Then he cuts taxes in the most uninspiring manner imaginable

The key to this tax cut is sentiment. Its about building a little confidence and making consumers feel slightly richer. You do this by putting the cash in their pockets directly. Point of sale (and its a £12.50 saving off a £500 tv...) does not inspire if the consumer isnt looking anyway

Would it have been impossible to have an immediate cut in income tax or even better, a rebate (as per the bush administrations)? Perhaps even a flat rebate regardless tax contribution? £200 each or something?
 
I guess the problem with a rebate or tax cut is that there's no way of ensuring that people actually spend the extra money. At least with the VAT cut, the only way of taking advantage of it is by spending.

As an aside, the VAT difference between the UK and Ireland is now 7%.
 
Does anyone know if the Flat Rate Scheme for VAT-gathering business are to be revised downwards in line with the headline rate.........or is it one for the accountant?
 
My aul fella will be up in arms over the VAT reduction, no doubt, given that he bought a 2008 up the North a month ago!
 
The one thing I cannot reconcile is the extra tax burden on the top few % of earners. Would it not have made more sense to allow them to keep their earnings but encourage them to spend it rather than save it - maybe by lowering VAT to 10% ? After all, the whole problem has been about getting more real cash circulating in the economy.

All Brown and Darling have done is pander to their natural voters by playing a New Labour version of Robin Hood - bashing the rich (those who supply the Government with a inproportionately large amount of their income) and giving the poor a few scraps.

They also haven't addressed possibly the most significant reason that we are so poorly placed to deal with the global cash crisis - the bloated level of state employment and the fantastic terms under which they work, what with virtually guaranteed jobs, retirement at 60 and a final salary pension. All this whilst plundering private pension funds again. Before anyone starts, I'm not suggesting that they start sacking nurses and teachers but they could question some of the jobs on offer below...

http://jobs.guardian.co.uk/job/778440/equality-and-diversity-manager/
http://jobs.guardian.co.uk/job/778042/digital-artworker/
http://jobs.guardian.co.uk/job/774318/executive-manager-mayor-and-cabinet-office/
 
The one thing I cannot reconcile is the extra tax burden on the top few % of earners. Would it not have made more sense to allow them to keep their earnings but encourage them to spend it rather than save it - maybe by lowering VAT to 10% ?
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thats from 2011 ...to pay for the current cuts


Totally agree about the state jobs. This is going to come under increasing voter scrutiny in the coming months/years.

the first job on that list is enough for me. Its very local to me. What the hell is all that about? you just know that they will spend their whole time (when not off sick) doing pointless presentations and attending useless meetings, getting that councils "flexitime" NINE weeks paid leave (mate works for them in a senior role) whilst waiting for a massive pension paid for from an exhorbitant council tax
 
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They can't lower VAT under 15% due to European law.

Nice of them to nick Obama's tax plan though :)
 
Quite a few put it up their nose in my experience


If they "dont deserve" it, they why are they paid it? Which business pays more than they ahve to for anyone?

Answer

Kingston Council for an Equality and Diversity officer
 
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I guess the problem with a rebate or tax cut is that there's no way of ensuring that people actually spend the extra money. At least with the VAT cut, the only way of taking advantage of it is by spending.
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In a way, but the money isnt there until its spent....if you see what i mean

If there is no increased expenditure (over what was expected...and thats hard to define), then its basically a waste of time. A cash rebate would definately be spent by a good proportion of recipiants. A flat rebate, would have even more effect
 
Andrew Hurley said:
Why don't they deserve it?
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What kind of salaried jobs pay more than £150K a year? I know that Fireman don`t get more than 30K and Doctors I`m not sure about - I suppose top consultants may pull in more than 150. But we`re surely talking lawyers, city types and overpaid executives aren`t we. People in general don`t need that amount of money to live comfortably off. So tax them more.
 
Talk about dinosaur politics

Doesnt it ocuur to you that some highly paid people are paid that highly because they add exceptional value to their business and thus the UK economy? Far more than they are rewarded?

Would we be better off if they simply up sticks and worked elsewhere?
 
I agree with the tax them more policy, but that doesn't mean they don't deserve their salary. The bonus culture I have a strong issue with in the city, but not sure I'd agree sweepingly all earning £150k+ are undeserving of it. After all, this is a capitalist economy so deserving or not is hard to apply.
 
clivex said:
Talk about dinosaur politics

Doesnt it ocuur to you that some highly paid people are paid that highly because they add exceptional value to their business and thus the UK economy? Far more than they are rewarded?

Would we be better off if they simply up sticks and worked elsewhere?
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I`d just like a fairer system. I concede that self employed people are a different kettle of fish (if that`s the sort of people you had in mind) but otherwise the exceptional value thing is the sort of argument that was made in regard to the oscene salaries those chinless wonders at the BBC were getting.
 
I wouldnt argue that quite a few people on high salaries do not justify them. I have worked with a few ...

But thats a issue for the market. Not the goverment or tax regimes
I concede that self employed people are a different kettle of fish (if that`s the sort of people you had in mind)
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No exactly. Within the area of the economy i know, a very highly regarded FD or (in my company) an exceptionally gifted director..would be worth that money and more
 
Euronymous said:
What kind of salaried jobs pay more than £150K a year? I know that Fireman don`t get more than 30K and Doctors I`m not sure about - I suppose top consultants may pull in more than 150. But we`re surely talking lawyers, city types and overpaid executives aren`t we. People in general don`t need that amount of money to live comfortably off. So tax them more.
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NHS consultants in general earn about £65k (depending on area) + whatever they make in their private practices, but they have to be NHS practitioners as well, otherwise they lose their licence to practice.

GP's earn more + have scope to make more from the NHS via second jobs and remuneration for various things.

Had a message from Amazon today to tell me that an item that I purchased yesterday is now £5 cheaper due to the VAT cut. Nice to see one firm's passing it on already.
 
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