VAT criticisms?

When VAT was introduced in 1973 purchase tax was 25%.

So VAT was introduced in 1973 and no one has noticed yet that armchairs were included ?

That should affect most on this forum.

Hi Neil,

I mentioned earlier that I would prefer a much simpler tax being equally levied on all society rather than an in-out law that appears to favour "more money going to more money" rather than being in key with a socially responsible policy. It might be undesirable to spend our money on tax but i'd feel a lot better about it knowing everyone was in the same boat, we need laws that unite us not division.

It pains me to disagree and to quote Wikipedia but apparently the evidence doesn't stack up for VAT being a socially progressive tool. Research has shown the poor spend twice the bracket of their income on VAT than the top percentile. It would appear to be more taxing on the poor if you believe what the research suggests, there are plenty of citations on this section so it appears to be a well founded claim. See criticisms section.

**LINK**

I relay your concerns about too much venting, although I personally fail to see how party politics could be introduced when the whole parliament seems to have agreed to this without much fanfare or media coverage at the time. They may have also not forseen how widely the exemption claims would go, nor how much the percentile charge would grow.

Michael W

Edited By Michael Walters on 14/12/2016 20:47:47

Indeed,  a recent family guy episode comes to mind, where peter griffin's workplace, a brewery is taken over by his rich father in law carl pewterschmitt and forces him personally to use a standing desk due to his natural hatred for peter and draconian outlook.

He tells him "Now you must use a standing desk, and you must actively promote it. And tell everyone else about how good it is to use a standing desk. it can't be your personal choice, you being right, mean's everyone else is wrong. From now on, you must refer to everyone else as the chair people and look down on them and tell them that sitting is the biggest killer in America 3 times a day."

Sorry, i'm clearly a big cartoon freak but this did come to mind!

Michael W

Edited By Michael Walters on 14/12/2016 21:10:11

As a yachtsman I have a problem in that VAT on red diesel is 5% because it is used for farmers & fishermen etc. marinas generally only sell red diesel. The EU object to yachtsmen having red fuel aboard & in belgium some boaters have been fined for having red fuel as they consider it illegal as they cannot be sure VAT has been paid on it. France will allow us to have red in our tanks on arrival but not in cans for top up. The same in Holland. So because I go to Belgium a lot i have to transport white fuel to my boat & use it all the time to avoid traces of red in my tank.

Currently yachtsmen in the uK can get Vat dispensation for proportion of fuel they claim for heating & battery charging so the bill will show 2 rates of VAT. This really winds the Belgians up. So even showing them receipts to prove VAT has been paid does not mean one will not be fined. So our use of cheaper red diesel ( even though it can be dearer than white diesel abroad) really causes a problem because of VAT rates

Probably because the poor spend all of their income while the better off don't need to hence a reduced vat burden in relation to income.

The percentage reading would mean that the statistic isn't dependant on the size of their income, it's the proportion that's counted.

It would be clearer to say that this is counted on "the money that is spent" rather than the size of the payees income. Its funny that I have to say that this is in relation to the consumer, when the tax is meant to apply to businesses, not consumers, it just so happens that they decided we should pay it not them, whilst they may happily reclaim their proportion on their expenses. I don't get to claim VAT from my household bill for example.

Michael W

Edited By Michael Walters on 14/12/2016 21:13:44

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Michael,

Sorry to be blunt, but that ^^^ is completely wrong

The guy at the end of the chain [i.e. the consumer] is, and was always intented to be, the one who pays the VAT.

... All of the businesses that are involved in the process are unpaid 'tax-collectors', effectively working on behalf of HMRC. The process is a game of "pass the parcel" and the one who is holding it, and not VAT registered, when 'consumption' occurs, is the one that pays.

MichaelG.

Hi Michael G,

I believe what you are describing is the process of what occurs in practice, which is totally correct, what i'm talking about is that the principle is shown to us, as being a tax on the value of the businesses purchases, it is therefore the businesses responsibility, not the consumers to pay VAT, the problem is nobody said you couldn't just bump up the cost price in order to pass on the expense, which is what has universally happened. There was never a clause which stated the consumer must pay VAT. You don't get a slip from HMRC (the most effective government department for obvious reasons) telling you what VAT you need to pay because consumers don't own businesses, therefore it cannot be a law directly related to them, the law concerns businesses not consumers. So although the outcome of it is totally correct, they never stated how a business should pay this.

It's interesting that I seem to have brought up a problem that affects an awful lot of people in different ways and a discussion that is generally absent in the public media, this is good because it means we are taking control of our own dialogue rather than being handed dogma dialogue from the media outlets, about many problems which effect nearly zero of us. That can only be a truly democratic thing. So we have a political media, that is not digging into what people care about, rather what the tycoon, what the director and editor care about. Unrepresentative? maybe, just maybe..

Michael W

Edited By Michael Walters on 14/12/2016 21:40:54

Edited By Michael Walters on 14/12/2016 21:51:55

"So VAT was introduced in 1973 and no one has noticed yet that armchairs were included ?

That should affect most on this forum."

Don't worry John you too will, one day, qualify for admission to the band. I should warn you though that the qualification comes with many duties that you workers can't even dream of.... and all these duties are unpaid! What is more they are supervised almost continuously. As an example today my duties were to drive the "boss" into Exeter, kick my heels for an hour whilst she had her hair "done", and then drive all the way back. This put out my daily duties, which you laughingly refer to as "armchair" sessions, considerably. What is more it disrupted the dog's schedule too. Workshop time? I can't even find the key to get in there. Well here it is 9.50 pm and I'm about to take to my armchair - where are you?

Norman

I wonder what this 'much simpler' tax might be? If we can come up with a good one there might be a peerage in it. Apart from Toilet Tax I'm stumped. Any suggestions?

Dave

VAT replaced PURCHASE tax.

Indeed, I stress again, that it isn't the fact we have to pay that concerns me, it is the way in which it is carried out in principle that concerns me. The clause doesn't state I am obliged to pay anything as a consumer, but then again I do need to buy things in order to live? Businesses may cover this with expenses but I can't cover mine?

Hence why I stated it seems to favour "money going to money" rather than benefiting those who need it most. It does appear to be in practice a tax on the poor. Refusing businesses to reclaim expenses would resolve this, people would not be able to class their personal expenditure in business categories which allows the rich to bypass the control. All for one and one for all laws rather than a rule for one and a rule for myself.

Not only that but it would save the public purse a lot of money, this would resolve the difficulty required in making a new law, whilst making the current one fairer and cheaper on the public purse. No one would be able to claim a tax which they are obliging ordinary people to pay but not themselves?

Poor people will not become satisfied by public policy alone, but I do believe we should avoid this trap that basic laws put them in but allow wealthier to be released. It would at least be a fairer rule in principle by refusing the rich the right of way they have been given for centuries.

The evidence seems to show that despite the rich having a greater proportion of disposable income, they can still find a way to spend a smaller percentage of their money on VAT against a group who have far less disposable income, who therefore are more likely to spend their money on VAT free/zero VAT products, and they can still spend more on VAT. Some one please tell me how that stacks up, unless the rich are circumventing the law by moving personal expenditure into business?

Michael W

Edited By Michael Walters on 14/12/2016 22:31:44

Sorry that you struggle to make ends meet, taxes are needed to support our community, the source can change but the need will always remain. Best wishes Michael.

Not to worry Michael, I am not resentful. I've known many people who have been forced to live precarious existences and I am all the richer for that. Poverty is a virtue in a well known religion after all. So I suppose I may have the last laugh upon high.

Michael W

Michael W, You clearly have never had the VAT man visit..... if you think any business is taking the tax man for a ride you should start a company and register for VAT, then you might understand the system a little better. As for it being a disproportional tax on the poor, if your living expenses are 100% of your income then VAT is a fifth of your wage. If it is only 10% of your income the tax accounts for one fiftieth of your income and the tax man sets about getting his pound of flesh by taxing your income at 40% instead....

Mark

No, I am not wealthy or clearly clever enough to run my own business. So I've never had a VAT man come to visit me. But by graces they taught me to read and I can see the research has already been done and has been shown to be regressive. 8.7% of the income of the 20% poorest is spent on VAT, whereas 4% of the gross income of the richest 20%. Since apparently, we are "all" paying VAT as consumers, where are they managing to ease the cost?  Drumroll the expenses claim!

Like I already have said, being poorer you are probably more worried about basic needs rather than luxury goods, this is supposed to be a benefit for reducing VAT expenses, yet some how the inadvertent benefit clearly isn't big enough to reduce the percentage. It isn't a question of if anymore i'm afraid. It is disproportionately effecting poorer by evidence.

Michael W

Edited By Michael Walters on 14/12/2016 22:58:28

Michael, you might find this HMRC page interesting (direct from the horses mouth rather than via wickedpedia) **LINK**

And by the way, you do not need to be clever or wealthy to own and run your own business, you just need to be sufficiently motivated and prepared to work considerably harder than most employed jobs... I am certain JS would agree that running a business leaves little time for the sofa!

Mark

I don't like your tone, I don't think you've had a good word to say to me, so you'd rather insinuate that I am too lazy instead and I wont listen to you anymore. Goodbye mark, enjoy the silence.

Michael W

Edited By Michael Walters on 14/12/2016 23:00:57

Mmmmm, so the argument isn't going my way so pack up my bat and ball and off I go. Oh well.

Mark