VAT criticisms?

I recall from a TV documentary, ages ago, that Income Tax was introduced as a "temporary measure" to pay for some war or other. It's been rather a long time now for "temporary" hasn't it!

Maurice

It was introduced at a very modest rate by today's standards to cover the cost of the Napoleonic War.

Compare and contrast

Brian

Yep - I think it was Benjamin Franklin who said that the only things certain in life are death and taxes - so it's not a new concept!

The money you earn is taxed, the money you spend is taxed and the interest you earn on any money that you save is taxed. ( although if you look at the rates of interest on savings accounts at the moment neither you nor the government makes a lot from that!)

Hey there is nowt that you can do about it so just relax, try not to worry and enjoy life whilst you can.

Norman

True, income tax commenced during the Napoleonic Wars along with a number of other taxes including one on clocks which effectively destroyed the UK clock industry.

A couple of years ago the Government announced it had paid off the final loans for WW1. What they had actually done was to bundle a lot of old loans which included WW1 loans into one new loan to gain advantage of lower interest rates. Also included were loans from the Napoleonic Wars. I guess in about 30 years time these loans will be repackaged again and the Government will make the same announcements.

JA

NJH - I get the impression that everyone is enjoying themselves moaning about VAT

VAT was, as mentioned, introduced (compulsory) when Britain joined the EEC.

As far as I have read up on it, it is reported to be a Tax Law imposed for being in the Common Market/EEC/EU membership. Legally, it must not be less than 15%, but can be adjusted to account for the costs of collection and payment. It seems to be for all intents and purposes a Membership Fee for being a member.

No EU Member is permitted to reduce it below this 15%, also, the EU decides on what the charge is applied to in the form of goods type, or service. I believe their (EU) plan is to eventually apply it to all goods etc.

Purchase Tax was applied/used post WW2 to assist with Debt repayments for 'Lend Lease' etc. It was 5% in 1958 according to the purchase receipt of an old Atco Mower I now have.

When/how we leave the EU, it can be reduced to below 15%, or even scrapped by the UK Government !!.

I suspect I'll still be paying it in 3 years time.

May I just cross-refer to my recent post on the "What did you do today 2016" thread ?

With luck this should be a **LINK**

http://www.model-engineer.co.uk/forums/sendtofriend.asp?th=113570&p=2105891

MichaelG.

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Incidentally: Unless things have changed since we started-up, the turnover threshold is not mandatory ... you can request VAT registration for even a very small business.

Edit: Just noticed that Neil has already mentioned something similar.

Edited By Michael Gilligan on 14/12/2016 17:41:00

There are more fundamental issues with the current system than VAT or income tax, both of which are a form of extortion.

Edited By blowlamp on 14/12/2016 17:29:34

And, sadly, we know how shockingly biased the BBC can be .

That's the scheme I use. In theory quite simple, but it didn't stop the chancellor b*ggering about with it in the Autumn statement. Not that I really understood what was fiddled with, but my accountant says it won't affect me. I saw my accountant this morning, and he reckons the chancellor is aiming to make the flat rate scheme less attractive. <redacted as it might be considered political comment> When I was selecting which category to be in I was a bit pee'd off that there is no category for electronics.

You can't claim VAT back in the usual sense under the flat rate scheme, but you pay a fixed percentage of quarterly turnover. There is a caveat to no claiming; you can claim the VAT back for capital items over £2k including VAT. Which is what I did with my 3D printer.

Andrew

I agree that, unfortunately, taxes appear to be necessary, but what is annoying is the apparent illogicality and unfairness which runs through the system. Large companies pay (proportionately) much less tax on large profits, yet people like pensioners get taxed on their income and savings, but have already paid tax on the money paid into their pensions. There are lots of anomalies in the system.

Many attacks have been made on expats (for example) - read the Daily Mail for many examples, but what people forget is that expats paid for their pensions, and (usually) pay tax on their pensions, yet get very few of the benefits from that tax, which people who live in the UK get as a matter of course.

The big question is "where's the money going to come from?"

Over the last 7 years or so government debt has risen sharply. It is now about £1.64Tn. (Yes, Trillion, £1,640,000,000,000,000,000 or roughly £27,000 for every man woman and child in the UK)

The Conservative and Labour Parties both pledged before the last General Election that they would return to Surplus by the next parliament. That is government spending would be less than government income, and the need to borrow would be curtailed. (This was not a commitment to settle existing debt.)

Until Brexit, slow progress was being made to bring government borrowing under control. I say slow progress because the then Chancellor of the Exchequer failed to reach any of his own financial targets. They were and are very difficult economic times. Now the Office of Budget Responsibility forecasts that Brexit will require borrowing an additional £59Bn. For this and other reasons the government is still borrowing heavily and it has abandoned it's policy to return to surplus by 2020. A key election pledge is in the dustbin.

Governments borrow because the political consequences of not delivering public services (Health, Defence etc) and paying the bills (Pensions, Interest on Loans etc) are severe. Cuts help balance the books but are unpopular. The Party faithful shriek with pain when it turns out the axe is going to land on them.

Short of a successful aggressive war, there are only three ways of raising more money: heavier taxation, increased GDP, and borrowing. It's very difficult for the Public Sector to lift GDP and continuous heavy borrowing is unsustainable.

It would be delightful to see taxation reduced and made fairer. Most unfortunately, I think this will be extraordinarily difficult to deliver. I'm expecting to see significant cuts in services and increased taxes over the next 10 years. Mr Hammond said in the Budget Statement “As we look ahead to the next parliament, we will need to ensure we tackle the challenges of rising longevity and fiscal sustainability, and so the government will review public spending priorities and other commitments for the next parliament in light of the evolving fiscal position at the next spending review.”

I'm too young to have done National Service. I did spend my youth working for chaps who had. Although they all had funny stories to tell, their opinion to a man was that National Service was almost a complete waste of time. They didn't benefit from it and the military, who much prefer volunteers, certainly didn't.

Dave

Yes I remember it well, even though my better half still insists it never happened, ( and she was a tax advisor before retirement)

I was in the market for a new HiFi amp & pre-amp at the time, as my previous Leak Receiver had lost a channel. I bought a setup from Quantum Electronics in Leicester, which is still in use to this day.

Amp and pre-amp were available at cost + 25% VAT; on the other hand, there was an "Educational Kit", where you bought a box of bits, and ended up with the same final product, but only rated at 8% VAT. Since I then worked for Post Office Telephones, and soldered stuff for a living, guess which one I bought.

I also mended the receiver a couple of months ago, so that's in use again as well. Trouble then was, that the oscilloscope blew up when I turned it on to try and fault the Leak. Ho Hum

The 'Money', such as it is, is created in the way shown in this video, as and when it suits its creator.

Interesting video Blowlamp - those Bankers have a lot to answer for! And I like the idea that politicians will always kick the can down the road because they don't want the financial system to collapse on their watch.

Modern banking was pretty much invented to pay for the Industrial Revolution. It makes you proud to be British. Arghhh!

Dave

You lot need to check your spelling, you keep spelling it "banker"

Mark

Like you i missed the experience

Yet there are those that said that it gave a sense of discipline to youth & i know some who actually used there time to start the learnings of a trade

So although many said that I suspect that many did not actually want to admit that it did do them some good

Ahem, the view on this forum are NOT those of MyTimeMedia or it's magazines and you will see that all I have done is explain some generally agreed facts about how VAT works.

I'd like people to refrain from getting deeper into politics because (a) there are other forums where you can do that but (b) chiefly because people start saying things that cause offence, create division and seed discord between forum members.

The discussion is heading that way rapidly and it WILL be closed if anyone gets closer to crossing that line.

If anyone want to take the debate to another forum, they can do so and post a link.

Neil

Hang on ! i thought a trillion was a million million so that is 6 digits plus 6 digits= 12 digits( plus the denominator =13 & you have 19 of them

Then I thought we had 64 million people ( is that right or have I forgotten 3.5 M immigrants ) so 27 * 64 = 1728 * stick 9 noughts on to that( Thousand , million) & we get £1,728,000,000,000.( Now I make that 1.7 trillion)

Is that right ???????

Edited By Sam Longley 1 on 14/12/2016 19:58:36

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It WAS once-upon-a-time, Sam ... but it isn't any more

**LINK**

http://www.bbc.co.uk/news/magazine-15478580

Breathe a sigh of relief ... The National Debt is much lower than you thought.

MichaelG.