VAT/Income Tax

[flip_flop]

Would increasing VAT to 25% (or whatever), making it non-recoverable and abolishing income tax work?

[Gromit]

Purchase taxes do not work because they raise the prices in the shops and people are disencouraged to spend their money.

HM treasury lose billions in tax every year through people fiddling VAT. It is better to Tax the invididual at source (from his/her pay) that from 3rd parties.

[Hotlardlife]

Except of course Gromit you have forgotten that does not include all the self employed and those that own their own ltd company.

Having said that as you say discouraging spending - particularly in the present climate would not be a good idea.

However we do need to address the problem where it barely (or in some cases doesnot) pays people to work. This shoudl be done by raising the thresholds, or a lower tax band (just like the one we had that labour saw fit to abolosh so stabbing many hard working peple in the back).

That and cut benefits, particualry to foreigners of course

[Gromit]

Hotlardlife

I can assure you that the self employed are not exempt from Income Tax.

[brionon]

Yes if you want to Tax the Poor.

[123everton]

I have friends who are self employed and talk about fiddling their taxes all the time.
One solution would perhaps be to have a single minimum payment that all paople who are not registered unemployed etc. would have to pay.
VAT is a tad unfair as it taxes lower income people more than higher ones.

[rov1200]

I agree with your suggestion of putting tax on purchases. Income tax evasion by the rich means the pensioner is sometimes paying as much tax as the millionairre. The poor would still benefit from tax free food, clothing and 5% on fuel. The paperwork would also be simpler.

[BillyBB]

VAT costs business thousands. We need to lower the obscene government spending and cut all taxes to boost the economy.
In all the recessions, in all history, across the whole world, doing the things that Brown has now has not worked economically. They have really been politically motivated.

The main thing here of course is that we cannot go more than 2.5% either way from 17.5% vat rate because of EU rules. The EU set our 17.5% rate in the first place.

[rov1200]

I'm not sure if you're right on VAT rates. Some states are in excess of 20% as this table show

http://en.wikipedia.org/wiki/Tax_rates_of_Euro pe

[BillyBB]

Thanks Rov, looks like we can increase our VAT but not have it below the 15% EU minimum set for our country. I got the impression at the time that it was EU that forced us to move to the 17.5% rate.