VAT rises to 20%!

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Member for

18 years 6 months

Posts: 2,343

So from midnight tonight, things are going to be that bit more expensive as VAT rises 2.5% (17.5% up to 20%!)...has anyone made best use of the Christmas/New Year sales to bag themselves a pre-VAT rise bargain, if so, what did you get?

Despite them outrightly denying they intended to raise VAT in their pre-election period, the Government now insists that the rise, combined with the massive public sector spending cuts, is necessary in order to tackle the budget deficit, do you agree, how will the VAT rise affect you?

Also, I find it rather annoying to see/hear Ed Miliband/Labour criticising the idea by saying its the "wrong tax rise at the wrong time"...when he/they have absolutely no other alternative to offer us?!:mad:

Original post

Member for

17 years 10 months

Posts: 877

I have no money now i will have less to spend tommorrow.
When everyone in this country shoulders the burden for this budget defecit ,including all the goverment i will listen to them ,at the moment it seems the only people suffering are those who can least afford it.One more rise in tax or cut in spending is only going to affect certain sections of the electorate.
Rant over!:D

Member for

16 years 7 months

Posts: 10,647

I'm thinking that this is going to effect the rich.
I have very little available money anyway, so doing the sales, buying new sofas and tellies, or considering a new car is out, whereas more well off people will think nothing of still spending money on needless items and thus contributing more to to the treasury.

I agree with your last sentence cloud-9, labour have a darned cheek criticising their own plans when they are having to be implemented by this government.

Member for

17 years 6 months

Posts: 985

Tax rises at the moment jeopardize the fragile economic recovery. The VAT rise has already had an impact on our buying and anyone who buys fuel will notice it pretty soon.

I notice that George "we're all in it together" Osborne managed to get his skiing holiday at Klosters in before the VAT rise though.

Member for

16 years 7 months

Posts: 10,647

That's a pointless statement, if they have the money then they are are welcome to spend it on a holiday, as anyone in there position could.
There is a difference between your job and what you do privately.

I can't see how it will effect the economy adversely if the more well off keep spending like they do, I was staggered at the amount excess that I witnessed over the holiday period.
Fuel is an issue that will effect us all, but we still have to drive to work, my fifty odd miles daily drive should contribute quite nicely. However those well off enough to be driving 20 MPG and £425+ p/a road tax 4x4s (slight jealousy as I really do like Audi Q7s) on a daily basis for no good reason are welcome to keep the treasury happy!

Member for

18 years 6 months

Posts: 2,343

Tax rises at the moment jeopardize the fragile economic recovery.

Just like Labour, you criticise the idea/plan, but then have nothing to offer as an alternative...so I ask you, how would you solve the crisis...what alternatives to tax rises/spending cuts can you suggest that won't jeopardize the fragile economic recovery?

Member for

18 years 11 months

Posts: 8,847

Maybe look at Oregon, NO sales tax! ;)

Member for

14 years 5 months

Posts: 4,956

The VAT rise will soon be forgotten, in itself, as the impact will be negligible on the majority of purses. What will not be forgotten is by how much actual prices on the high street will rise under the guise of the VAT increase in the weeks to come. A £300 TV will cost £8 more...items under £40 will cost pence more.

Member for

19 years 6 months

Posts: 1,518

Maybe look at Oregon, NO sales tax! ;)

VAT brings in 14.7% of govt tax revenues, so unfortunately I don't think we will see the back of it anytime soon.

Member for

14 years 5 months

Posts: 4,956

I agree but examples are meaningless in isolation so it would be helpful to know how Oregon finances its budget.

Member for

17 years 6 months

Posts: 985

That's a pointless statement, if they have the money then they are are welcome to spend it on a holiday, as anyone in there position could.
There is a difference between your job and what you do privately.

Osborne shouldn't lecture the rest of us on austerity measures should he. It wouldn't have done him any harm to act sensibly and stay in the UK this winter - then again it is Osborne we're talking about.:rolleyes:

The posters on here must be very well off if a 2.5% price on many items will have no effect. It is true that TV may only rise £8 but the cumulative effect of a 2.5% price rise will be significant to many households in conjunction with other loss of earnings. Interesting that many retailers are planning to absorb the VAT rise initially - they clearly think it will have an effect on sales.

Labour's idea was that the tax rises and/or cuts should be phased over a longer period of time. Already the welfare budget has risen above the predicted level as more folks lose their jobs because of measures implemented too fast and poorly thought out. UK economic forecasts are starting to be downgraded as the "austerity" measure bite where they will hurt most. It will take only a small rise in inflation for the whole fragile recovery to collapse.

Member for

14 years 5 months

Posts: 4,956

The government has not done a good enough job of convincing us just how dire the situation is. So, for many people it is not yet a reality. As for delaying and putting off the inevitable we are already so far in hock that to go down Labour's road would exacerbate the situation.

Life is unfair! We have to accept it. If people are fortunate enough to have money I don't decry them it - what is the point? Our life at home will be measurably worse and our business is just about surviving. That's the challenge - to get through 2011. Moaning about a few wealthy people who enjoy their money is just childish sour grapes, a fruit which is in plentiful supply in recent years in the UK!!

We will all become worse off courtesy of creeping and hidden inflation. The BoE hasn't the balls to increase rates at the risk of increasing the value of sterling so this year we will probably see the real value of our money reduce by as much as 4%.

Member for

17 years 6 months

Posts: 985

I believe the current administration have overdone how bad the situation was in order to get their measures through. The measures Alistair Darling put in place tried to ensure that the economy due to WORLD recession was recovering from around March/April 2010, just in time for George and his mates to come and jeopardize that recovery.

Interesting that it is OK for Osborne to go off on holiday but I seem to recall a huge amount of criticism when Tony Blair did the same - and we weren't under going "austerity" measures then either.

When I meet people who have or are losing their jobs as a result of government measures, I can understand bitterness towards those who have taken those decisions, especially when they appear to be taking expensive holidays and especially when those measures appear to make no sense. Nothing to do with sour grapes or jealousy.

Member for

14 years 5 months

Posts: 4,956

Your first paragraph shows how last year's labour spin has stuck fast, and I am sure you are not alone. Did you actually read the figures produced by the Treasury for the Budget and the Spending Review. If you really believe the figures have been overdone then, perhaps you, and many others are in for a ruder shock than those of us who have been doing a bit of reading in the last few months. Not political spin, not forecasts but simple numbers of what we earn and what we owe and how much we have borrowed over the last 10 years, and how much it is costing to pay it back - oh, that's just the interest, not the loans! And people blame the bankers!!! Their irresponsibilities pale into insignificance beside those of our politicians.

Member for

17 years 6 months

Posts: 985

And your reply Skyhigh shows how much the government's spin has stuck.

I understand completely what is at stake but scaremongering the public into accepting swingeing cuts is not the right way.
Much of the debt was built up to support our major banks. Would the Tories have really let them go to the wall? We would have been in a deep depression then, not a recession.

Member for

14 years 5 months

Posts: 4,956

Sorry, Arthur, but the support for the banks was the final nail in the coffin. The debt had been building solidly year on year from about 2001 when Brown released himself from his, up to then, highly responsible "prudent" approach to money supply, which had been the previous government's policy.

I agree, scaremongering is irresponsible: giving people the facts is not.

Member for

17 years 6 months

Posts: 985

The debt had been rising slowly from around 2002 (after falling from 1997 to 2002) as a result of increased spending on health and education (from which we all benefit). It rose much more quickly in 2008 as result of bank bailouts and reduction of tax receipts due to the recession.

There is no doubt that the Tories inherited a large amount of debt but it is debt which is there for a reason and that reason is not economic mismanagement but the saving of the economy from a much worse fate.

Member for

14 years 5 months

Posts: 4,956

Yes, in fact the descent had been steady from 1994.

Your phrase "...from which we all benefit" is telling. If we had seen major improvements in public services as a result of the huge increase year on year from 2002 to 2008, there would be some excuse. As it was, the government spent more and more money, that it didn't have, on services which have little or nothing to show for it. Maybe a bright new building here and there and of course 600,000 new jobs, but people are not cared for any better nor are they educated any better - in fact the decline in real education standards is appalling.

It goes without saying that our views on your last paragraph are diametrically opposed. But, as the man said, we are where we are. People will argue the merits of the case for years to come but it is crystal clear that we cannot afford to service the debt we have so it has to be reduced. On that, I presume we are agreed, so most of us will feel pain in the years to come. And that's a point which is seldom made strongly - this ride is for the long term, not the quick fix.

Member for

17 years 6 months

Posts: 985

I would certainly agree that we have sort out what we have, we just disagree on how.

Where I would disagree is in your statement about the health service. My experience is that there has been a massive improvement in the last 10 years or so. Improvements can still be made though. I also have no complaints about the standard and quality of education my daughter is receiving. In this respect, I can only base my opinion on my experience.

Member for

19 years 5 months

Posts: 9,821

Can tourists aviod paying VAT on items they take home?

Member for

24 years 2 months

Posts: 6,968

I don't know but if you'd care to take the Houses of Parliament and all the current incumbents I guess you could have them for nothing. We'd probably even give you a little something for your trouble.

Regards,

kev35