Is 20% VAT Fair?
There has been a lot of fuss about raising VAT to 20%. I‘m in favour though
- Most countries in Europe have a rate of 20% or over.
- There is no VAT on food, so perhaps instead of eating out all te time, it’s time to learn to cook. After all, there are masses of books and programs on the television. There is no VAT on books.
- There is VAT on fuel, so change your driving hsbits and use less. This a good thing as we will cut carbon emmissions. Osborne should have raised fuel taxes substantially, though!
- There is VAT On building work, so perhaps it’s the time to learn to do things yourself.
- There is VAT on consumer goods, such as telvisions, but then do you really need a four metre screen. I suppose it goves a better picture for those who watch Royle Family style with endless cans of lager. As large screen TVs use a lot of energy, there is a special case for taxing the larger screens heavily. But you can always buy one before next January. It could be argued that as virtually all consumer goods are imported , that a drop in demand would be a good thing.
- But my main reason for liking VAT is that everybody pays a bit. Remember that because of pension and income tax changes, many people will have a little bit more to spend.
The Anonymous Widower 
I too am in favour of the VAT increase. It represents only a 2.1% increase in prices for items that carry VAT and, as only one £1 in £7 of expenditure by the low paid carries VAT (no VAT on rent, mortgage payments, food,, children’s clothes, books, newspapers), they will see only a 0.3% increase in their costs. There are other measures to help these people that outweigh the effect of VAT.
For the average family with an income of £24,000 Deloitte calculate an increase in costs of £183 p.a. of 0.76% of income.
The £13bn gain is high because we all pay it, and although the wealthy pay a lower percentage of their income in VAT (their purchases of consumer goods represents a smaller proportion of their income), they nevertheless still pay significantly more in absolute terms.
Comment by John Wright | June 23, 2010 |
New housebuilding is in trouble and they don’t carry VAT, so we might see an increase in housing starts which would be a very good thing!
Comment by AnonW | June 23, 2010 |
I heard on the radio yesterday that, contrary to popular belief, many ‘food’ items in the supermarket are subject to VAT and that the list of what items are zero rated appears to be entirely arbitrary. The increase is rather unfair on those for whom salaries will be frozen and jobs lost in my view.
Comment by Emma | June 23, 2010 |