VAT criticisms?

[MWParticipant @mw27036]

Posted by Michael Gilligan on 14/12/2016 21:30:02:

Posted by Michael Walters on 14/12/2016 21:08:45:

… 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.

.

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

[NJHParticipant @njh]

"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

[SillyOldDufferModerator @sillyoldduffer]

Posted by Michael Walters on 14/12/2016 20:45:22:

Posted by Neil Wyatt on 14/12/2016 16:45:29:

…

I mentioned earlier that I would prefer a much simpler tax being equally levied on all society

…

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

[Michael BriggsParticipant @michaelbriggs82422]

VAT replaced PURCHASE tax.

[MWParticipant @mw27036]

Posted by Michael Briggs on 14/12/2016 21:57:09:

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

[Michael BriggsParticipant @michaelbriggs82422]

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.

[MWParticipant @mw27036]

Posted by Michael Briggs on 14/12/2016 22:23:44:

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

[Mark CParticipant @markc]

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

[MWParticipant @mw27036]

Posted by Mark C on 14/12/2016 22:41:50:

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

[Mark CParticipant @markc]

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

[MWParticipant @mw27036]

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

[Mark CParticipant @markc]

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

Mark

[Martin CottrellParticipant @martincottrell21329]

Michael,

You seem to have a fundamental misunderstanding of how the VAT system works. If you re-read the post by Michael Gilligan at 21:30:02 he has very succinctly outlined its aim to be a tax on goods and services produced to be paid by the end consumer of those goods and services. The VAT that you pay a supplier doesn't go to line his pockets, he collects it from you and then passes it on to HMRC who then give the money to the government who provide you with services such as healthcare, education, security through the armed forces and a very considerable social welfare budget to help the poorer people in our society & so much more besides.

Nobody likes paying taxes but most people agree that they are a necessary means to support our society in general. The arguments start when trying to decide how to divvy the proceeds up but I guess thats what we pay our politicians to sort out for us!

Regards Martin.

[MWParticipant @mw27036]

Hi Martin,

I may well have a stunted understanding of VAT but I notice you didn't care to suggest how the evidence I provide for it becoming a tax burden on poorer people is invalid. There isn't even an attempt to address it, yet alone invalidate it. You can see I've stressed many times that I fundimentally am for the idea of a tax. I am only tempted to clam up because I simply become a victim of disinformation or character assassination because I dared to speak up. I think this ought to be closed now.

You wont get another peep out of me on this matter. I would rather that than start collecting a club of silenced posters, in effect they have silenced me, but maybe they can find common ground with each other in their own posts without me to derise, clearly they'll have a whale of a time.

Michael W

 

Edited By Michael Walters on 14/12/2016 23:31:43

[Mark CParticipant @markc]

"disinformation or character assassination" I really fail to see how we get to this statement from my initial comments?

Mark

[John Stevenson 1Participant @johnstevenson1]

Posted by NJH on 14/12/2016 21:50:41:

"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

.

Actually sat in my new week old Staples office chair [ VAT deductible ] doing end of year accounts.

3 nights this week and a couple next week. Then a blitz after boxing day to get the decks clear for doing the VAT at the end of December although it doesn't have to be paid until end of January which also coincides with the first payment for 2015 /2016 income tax, followed by the second payment in July.

I think I'm lucky in that as a sole trader I don't have to pay corporation tax as well.

All unpaid.

[Mark CParticipant @markc]

I hope you are wearing a shirt of sack cloth to sit in that new chair.

I started out as a sole trader but very quickly found out that most clients dislike this arrangement (they expect consultants to be Ltd for some reason).

I don't think there is that much in it regarding TAX advantage between the two models (sole trader or ltd.) for small companies, you get to paying your tax whatever way you go. You are correct about the admin work required as there are more formalities to be dealt with for a ltd company and as you mention, it all has to be done on time so you get the pleasure of putting several hours in as unpaid overtime!

Mark

[blowlampParticipant @blowlamp]

Consider this whilst working out your tax returns…

…good to see it's being spent wisely.

 

Interestingly, even The Telegraph seems to be begging now.

Edited By blowlamp on 15/12/2016 00:10:52

[Martin CottrellParticipant @martincottrell21329]

Posted by Michael Walters on 14/12/2016 23:29:19:

Hi Martin,

I may well have a stunted understanding of VAT but I notice you didn't care to suggest how the evidence I provide for it becoming a tax burden on poorer people is invalid. There isn't even an attempt to address it, yet alone invalidate it. You can see I've stressed many times that I fundimentally am for the idea of a tax. I am only tempted to clam up because I simply become a victim of disinformation or character assassination because I dared to speak up. I think this ought to be closed now.

You wont get another peep out of me on this matter. I would rather that than start collecting a club of silenced posters, in effect they have silenced me, but maybe they can find common ground with each other in their own posts without me to derise, clearly they'll have a whale of a time.

Michael W

Edited By Michael Walters on 14/12/2016 23:31:43

Michael,

I wasn't intending to challenge your quoted figures as I have no idea as to their validity. You seemed to be suggesting that VAT registered companies were using VAT as a means to boost their bank balances at the expense of the consumer which in my opinion is not the case for the reasons I outlined, hence my reply. I was also trying to point out that most of us benefit in many ways from the services that are provided by the taxes we pay so its not all just a one way drain on our pockets.

I'm very sorry if my post offended you, that was not my intention. I will just finally say this though; if you don't want people to argue with you on this forum you shouldn't post your opinions about controversial subjects.

Regards Martin.

[John Stevenson 1Participant @johnstevenson1]

Posted by blowlamp on 15/12/2016 00:08:29:

Consider this whilst working out your tax returns…

…good to see it's being spent wisely.

Interestingly, even The Telegraph seems to be begging now.

Edited By blowlamp on 15/12/2016 00:10:52

.

They are welcome to it Martin.

When the ROF was going at Nottingham I used to make the triggers for the Heckler a Kosh machine pistol.

Absolutely 1,000's upon 1,000's or the damn things. I was glad when the ROF closed down and they took the line back to Germany. That was one job I never missed.

PS hows the threading going on with Planet CNC ?

[Sam Longley 1Participant @samlongley1]

Posted by Michael Walters on 14/12/2016 22:08:52:

Posted by Michael Briggs on 14/12/2016 21:57:09:

VAT replaced PURCHASE tax.

 

 

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.

I think one needs to correct that misconception

One is allowed to claim expenses in connection with operating the business.

Which is different to expenses for personal use which I believe that you are implying in your general text

Edited By Sam Longley 1 on 15/12/2016 06:00:56

[Dave DanielsParticipant @davedaniels93256]

A year or so ago I bought some L297 chips from China, like these:

JsAAOSwknJX0Sjt

Not that seller IIRC but some £3 for 10, P&P Incl.

Duly arrived, Postie demanded some £11 ( I think ) to release … told him contents were worth £3 and said to take them away and dump them. About 10 days later they were shoved through the letterbox.

As these things are currently some £9 a pop from Farnell I didn't have much confidence but worth a punt for 30p.

And they do seem to work fine.

I have had other cheapo stuff from China delivered OK. No idea why that delivery went wrong ??

 

D.

 

 

 

Edited By Dave Daniels on 15/12/2016 07:23:41

[pgk pgkParticipant @pgkpgk17461]

When i first started flying and crashing r/c helis I used to buy my spares direct from china. The postal service was innundated with folk doing similar things… used to get my parcels usually within 3 days and no taxes. Then they created a new customs sorting office in Birmingham? and everything went through there – delays and taxes. There is a (legitimate) handling fee and vat on the goods and postage and that fee. Couriered stuff they wanted £13 handling and they moved to assessing value here irrespetive of the declared value since the chinese marked everything as low value toys to try and keep their market going.

When you think about it there is an international postal agreement that the service in the country of origin gets the postage fee and the delivering country just delivers with no revenue. You can imagine how much stuff royal mail is carting around for nowt. The chinese fee for postage is peanuts compared to the UK charges to send stuff there – which makes it a one-way market. I could buy stuff for £4 or £5 delivered but if I wanted to return the item then the fee might well be £30 UK post.

As to vat – the original concept was that it would pay for europe… but like all taxes gets used for whatever Gov wants.. and as an unwieldy tax it creates jobs. It used to take me 2 solid days every quarter to work through my vat return for the privilege of paying £30K to the coffers. HM C&E refused to allow me to charge them for my time… I did argue that when they sent someone to check my books that guy didn't work for free… so why should I?

Gov wants power. Power to them means control of more people, more international posturing and vanity projects to crow about. All that means they need to control the mass and keep it 'happy' unnecessary jobs and make-work are one way. Fr;instance there's absolutely no reason why fuel duty couldn't be calculated to include vehicle tax and insurances and MOT's – no-one could avoid it and road congestion would drop but the motor insurance industry would collapse as would most of swansea with unemployment. It's why we have an economy dependant on folk buying overpriced coffee in cardboard cups

[Neil WyattModerator @neilwyatt]

> As to vat – the original concept was that it would pay for europe… but like all taxes gets used for whatever Gov wants

So many misconceptions. If that was the case, they would have added it on top of purchase tax, not replaced purchase tax.with it.

N.

[Clive IndiaParticipant @cliveindia]

I think, I say I think and may be wrong, VAT distorts the market when you start buying/selling between registered and non-registered traders.

Let us imagine a model engineer is selling a loco to a VAT registered trader e.g. the wellknown guys in Lincolnshire.

Most loco owners are not VAT registered I suggest.

Let's imagine the traders could expect to sell the loco for about £6k including VAT.

1/6 of the selling price is VAT = £1k

Presume the trader has to make a profit, pay staff and take into account the risk – perhaps £1,500 would be a suitable amount.

All this means the maximum the modeller can sell his loco to the trader for is £3,500.

Thus, I think he would be better off selling to a non-registered trader who could, I say could, afford to give him more and make the same profit – and regstered traders might go out of business.

There may be errors in my thinking – grateful to be corrected.

 

Edited By Clive India on 15/12/2016 09:42:06

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