VAT: How much would you pay? Watch

04MR17
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When making a purchase you will often find on your receipt a small sub total under your bill, with the letters VAT. Value Added Tax is applied to many of the goods and services within the UK economy, and allows the government to bring revenue in from those transactions between a business and customers.

The standard rate of VAT on most items falls at 20%. When you think about how much money you spend that can have VAT applied, this can add up to quite a lot of money.

However, the TSR Government would like to reform Value Added Tax, the Liberal Democrat party in the Model House of Commons reduced VAT on sanitary products last term, and we'd also like to reduce VAT on goods and services where appropriate.

The issue is so many items are taxed, and sometimes at different rates. So it can be difficult to decide what to reduce VAT on, and what to keep VAT on.

You can find a list of which rates are applied to which goods and services here.

Our questions for you:

> What goods and services shouldn't have VAT applied to them?

> Are there any items you think should have MORE tax applied to them? Or you think SHOULDN'T be reduced?

> What would you reduce government spending on to account for reduced VAT revenue?

> What would you like to see your VAT spent on?

Post your thoughts below.

(This thread is part of a Government Consultation from the undefined. You can get involved in our other threads here.)
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fallen_acorns
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Raise VAT by 20% for all goods purchased online.

Would go a fair way towards leveling the playing-field between online shops and the high-street.
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CatusStarbright
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(Original post by fallen_acorns)
Raise VAT by 20% for all goods purchased online.

Would go a fair way towards leveling the playing-field between online shops and the high-street.
I really wouldn't do that; it would stifle the economy. What would be better would be to lower business rates for SMEs instead.
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NotNotBatman
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Keep it at 20% with a maximum incidence on the consumer at 15%. Along with a strict crackdown on price fixing.
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04MR17
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(Original post by NotNotBatman)
Keep it at 20% with a maximum incidence on the consumer at 15%. Along with a strict crackdown on price fixing.
And how would you recommend this be done? :holmes:
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Napp
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(Original post by fallen_acorns)
Raise VAT by 20% for all goods purchased online.

Would go a fair way towards leveling the playing-field between online shops and the high-street.
Would probably also cause a revolution :lol:
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ThomH97
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(Original post by fallen_acorns)
Raise VAT by 20% for all goods purchased online.

Would go a fair way towards leveling the playing-field between online shops and the high-street.
I'd agree with that. It's social engineering, but I do think it's worth getting people off their backsides and meeting people, while stopping the high street becoming flooded with gambling shops, nicotine shops, caffeine shops and second-hand shops. I don't have anything in principle against the latter, but some things you do need to buy new.
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Apachecow
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Perhaps rather than reducing VAT on disposable sanitary products, why not reduce the VAT on less wasteful alternatives? Maybe that is a more meaningful solution.

I also feel that the government cannot afford reduced tax revenue, so for each time you CUT VAT then you need to RAISE it somewhere else.
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fallen_acorns
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(Original post by ThomH97)
I'd agree with that. It's social engineering, but I do think it's worth getting people off their backsides and meeting people, while stopping the high street becoming flooded with gambling shops, nicotine shops, caffeine shops and second-hand shops. I don't have anything in principle against the latter, but some things you do need to buy new.
For me its just part of a shift away from viewing town centres as purely a fianncial/retial area, and towards seeing them as one of the main public resources of an area. The town center, the church, the schools, the town hall etc. all made up the communal spaces that were essential for people to congregate, mix, and form a single cohesive identity, something which we all need to give us a sense of security and happiness. I do think bringing them back, even if to do so you need to make us all a little poorer, is worth it for the societal benefits they bring.

(The really interesting one on the list of social meeting places is the church, which played a huge social role for communities in the past, as well as its religious role. For me, one of the other great losses to our communities, is that in abandoning the church for religious reasons, we have also given up one of our biggest community assets.. if we were planning it logically we would have aimed to replace churches with highly active and functional community centres, but that largely didn't happen.. we never truely replaced the community aspect of churches)


(Original post by Napp)
Would probably also cause a revolution :lol:
Your right.. its never really going to happen in a political system/climate like ours. It would have an awful short term impact on people, and any government that introduced it would be taken to pieces. Its a shame though, because I do believe that in the long-term when people see that their small sacrifice in wealth is met with a re-invigoration of one of the most essential public spaces, I think they would understand.

It is one of the flaws of a democratic system like ours. For all of its advantages over other political systems, and there are certainly more advantages, the inability of democratic systems to pursue policies that would be very unpopular for the short term, but would prove beneficial in the long-run.

(Original post by CatusStarbright)
I really wouldn't do that; it would stifle the economy. What would be better would be to lower business rates for SMEs instead.
I get where your coming from, but for me it just doesn't do enough. If you hypothetically say the potential price difference between online shops and the high-street can be 20%, only a portion of that difference can be recouped by lowering business rates. You would still find that online stores are cheaper.

It would work in the short-term because currently there are enough people still stubbornly buying more expensive products in shops rather than online, but they tend to be the older generations who don't understand or like buying things online. As they move on, and the younger generations who are so ready and willing to purchase online take hold, it simply wont be feesable for shops to run unless they can compete on price with their online rivals. Anaylists can go on about how shops need to make their store an 'experiance', and that's great for some sectors that lend themselves to being 'experiances', but it doesn't work for all, and even then a lot of people take the 'experiance' in the shop, and then go and buy online.

For me, we had a very functional retail enviroment before online came and distrupted it.. buisness rates were not a problem back then, and we had lovely thriving highstreets and shopping centers. Now we have a lower-taxed, cheaper alternative, and I would rather bring that up to the level of cost to operate that the shops were running, rather than letting the shops lower themselves to the rate of online stores, in a race to the bottom that leaves us collecting less tax, and having less to spend on areas that need it.
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paul514
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(Original post by 04MR17)
When making a purchase you will often find on your receipt a small sub total under your bill, with the letters VAT. Value Added Tax is applied to many of the goods and services within the UK economy, and allows the government to bring revenue in from those transactions between a business and customers.

The standard rate of VAT on most items falls at 20%. When you think about how much money you spend that can have VAT applied, this can add up to quite a lot of money.

However, the TSR Government would like to reform Value Added Tax, the Liberal Democrat party in the Model House of Commons reduced VAT on sanitary products last term, and we'd also like to reduce VAT on goods and services where appropriate.

The issue is so many items are taxed, and sometimes at different rates. So it can be difficult to decide what to reduce VAT on, and what to keep VAT on.

You can find a list of which rates are applied to which goods and services here.

Our questions for you:

> What goods and services shouldn't have VAT applied to them?

> Are there any items you think should have MORE tax applied to them? Or you think SHOULDN'T be reduced?

> What would you reduce government spending on to account for reduced VAT revenue?

> What would you like to see your VAT spent on?

Post your thoughts below.

(This thread is part of a Government Consultation from the undefined. You can get involved in our other threads here.)
FYI you can’t get rid of VAT on sanitary products hence the term ‘tampon tax’ it’s part of EU rules.

The government currently donates the amount taken in the tampon tax and gives it to women’s charity’s until we have left and can abolish it
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04MR17
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(Original post by paul514)
FYI you can’t get rid of VAT on sanitary products hence the term ‘tampon tax’ it’s part of EU rules.

The government currently donates the amount taken in the tampon tax and gives it to women’s charity’s until we have left and can abolish it
We can (and have done) in the Model House of Commons because here canon dictates that our laws override UK or EU law.
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shadowdweller
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I think VAT should be taken off of things like children's car seats and similar; these are required for the safety of the child.

I also think VAT shouldn't be applied to "converting existing premises by increasing the number of dwellings within the building" - availability of housing is a big issue, and it seems counterproductive to add tax to those aiding with a solution.
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landscape2014
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In a democracy surely everyone who uses national currency in transactions should be taxed at a flat rate. VAT illustrates perfectly the work-creation scheme that is the British taxation system, complex, full of loopholes you have to employ people to collect and police it because it like income tax, business taxes and NI contributions are resented and avoided by those upon who they are levied. The tax system encourages corruption (and creates employment) its about time the thoughtful of Britain turned their consideration to eliminating VAT, income tax, business taxes, et al and considered a flat transaction tax. If they do they will rapidly appreciate that VAT is part of a scam that has been practised on the British for centuries because if everyone who used national currency in transactions were taxed at a flat rate the 99% would find their contribution fall from £400 billion to just £3.2 billion. Arguing about the level of VAT and what it should be levied on is the C21st equivalent of the medieval argument over the number of angels who could stand on the head of a pin.
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