Increase in VAT on New Years Eve

[anotheoldgit]

http://www.dailyexpress.co.uk/posts/view/11555 3/VAT-will-go-up-on-New-Year-s-Eve

Apart from the inconvenience to businesses, will this cause any particular hardship?

Was the temporary reduction of 2.5% in VAT just a complete waste of time?

These measures cost the Government around �1billion a month.

What could this money have been better spent on?

[Gromit]

This is hardly news, it was always going to be a temporary measure and it was always mean't to finish on the 31 December 2009.

Most shops knew this so have not re-labelled their prices. In the shops, items are still �9.99, but you get more change.

My opinion was that it has made no difference at all. But it was just one of a series of measures to deal with the credit crunch. Not all of them was going to work, but at least they tried.

The money could have been better spent providing Dove Houses for every MP.

[ludwig]

Yes, it was a complete waste of time. It cost the government (and business) alot of money while providing virtually no incentive for anyone to go and buy anything they weren't already planning to.

Having said that, I agree with Gromit - one of many measures, not all were going to work, at least they tried.

[jake-the-peg]

This was a political miscalculation.

At the time Cameron was making a big deal about tax cuts to boost the economy and Brown got lured into taking this action.

Actions like the scrappage scheme have been much more effective

[youngmafbog]

This was always going to be a mess. Shops were reducing prices by far maore.

It had nothing to do with Cameron. His tax cuts are a totally different kettle of fish.

[naomi24]

This whole government is a political miscalculation.

[rov1200]

The government seta aside �12bn for this tax relief. Complete waste of time and to many is hardly recognisable in the purchase price.

If there were to be a tax relief it should have been targeted at items that would keep our people in jobs.

[Gromit]

Apparently, Business leaders and MPs do not agree that the VAT cut was a waste of time.

They are calling for it to be extended beyond the 31 December deadline.

"An extension would give a lifeline not only to struggling retailers but also to the poorest families, who would be hit hardest by the tax returning to its higher level, economists said."

http://www.telegraph.co.uk/finance/newsbysecto r/retailandconsumer/5895354/VAT-cut-must-be-ex tended-business-leaders-and-MPs-say.html

The Daily Telegraph, who were originally underwhelmed by the move, is now launching a campaign to postpone the planned rise.

[socket2008]

Of course the original 15% VAT was increased to 17.5% because of black Monday. Everyone seemed to forget that. The loss on that day was surely recouped a while ago.

If VAT goes up to say 20% and the Government starting giving the recession spin as ot the reason why, ask the government in office at the time a few years later why VAT hasn't reverted back.

We all know the VAT thing was a waste of time. A few friends that own businesses said they had no intention of reducing VAT. One said at the time 'do you think I am stupid'. It's been a nice little earner for some businesses.

Watch out for the double wammy as prices go up as well as VAT so companies used to the extra income make sure they don't lose it..