VAT reductions wouldn’t necessarily stimulate business capex anyway as VAT due on b2b sales are offset, so VAT bills paid aren’t 100% of 20% of sales.
A reduction in Corporation Tax or tax relief on specific investments would incentivise more.
VAT to be cut for a year
- Thread starter Hair Flick
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VAT reductions wouldn’t necessarily stimulate business capex anyway as VAT due on b2b sales are offset, so VAT bills paid aren’t 100% of 20% of sales.
A reduction in Corporation Tax or tax relief on specific investments would incentivise more.
Goat Eyes
Striker
Course, but a reduction in the IT rate wouldn’t either. It might stimulate the economy for a short time but the impact to the coffers would far outweigh the benefit IMO.
Businesses already get tax relief on new plant / machinery
There’s a fine balance to be had. There is discussion about a recession which is unlike any before. The reason isn’t economically driven, it’s in reaction to something else. The quickest way to change the direction of the curve is to stimulate spending. What I’m unsure about is how deep this recession could be if the government do nothing. Which they won’t.
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I can’t see it stimulating capital expenditure in the business sector at all , a reduction in vat from 20% to say 15 % will increase cash flow in the short term , most businesses will i would think will keep that in reserve rather than spending freely.
On a £1m turnover inc vat the difference would only be about £800 a week
I may be wrong .
Shandy drinker
Striker
Wasn't one of those uplifts supposed to be temporary
toxic tracksuit
Central Defender
Got to say, although the Gov have fucked up on a few things (lack of testing, locking down too late, care homes scandal) they are going for it in terms of supporting people financially. Furlough scheme is one of the best in the world. L Not a very Tory thing to do, but positive IMO
Goat Eyes
Striker
Here is an interview with him if you have Facebook. Not listened to it yet but assume it outlines his predicament.
D
Deleted member 6694
Guest
I don't think I'm understanding this post
If a business sold a car every week for £1,000,000 inc VAT for that £1m weekly turnover then the VAT would have been £166,667@20% (I think). If they kept price at £1,000,000 and VAT dropped then it would be £130,435@15%. So wouldn't that be an extra £36,232 a week the business gets to keep?
I'm completely missing where the £800 estimate come from?
I don't think I'm understanding this post
If a business sold a car every week for £1,000,000 inc VAT for that £1m weekly turnover then the VAT would have been £166,667@20% (I think). If they kept price at £1,000,000 and VAT dropped then it would be £130,435@15%. So wouldn't that be an extra £36,232 a week the business gets to keep?
I'm completely missing where the £800 estimate come from?
I’ve used the example
£1m per annum turnover including vat @20% against the same turnover including vat @ 15%
the difference is round figures £43k per annum = £800 per week ish.
Goat Eyes
Striker
Aye. For the record I’d love them to combine both.
D
Deleted member 6694
Guest
haha
As I was looking at weekly turnover as I just saw week in your post Though is it not £36K less VAT to pay (£700 a week) like I gave in my example if they sold one £1m car a year then or am I missing something simple again? Would it also depend on what their percentage of turnover is profit?If I had a £1m turnover selling 10,000 things at £100 and make say £10 per item, I'd make £100,000 profit. If I then save £36K (or £43K) per annum thanks to a 15% VAT and nowt else then I'd be ower the moon as I'd then make £136K profit which is over a 30% increase!
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Joe Public
Striker
Fuck that I’ve just had me driveway done.
I’d be surprised if any of that VAT money made it’s way into government coffers.
A lass my missus works with is in the same boat.There’s thousands, if not millions of legitimately self employed people who have missed out.
As an example, one of my friends / work associates has been employed until 20 months ago when he went self employed. He’s been self employed for 20 months and paid all taxes as he should. Because he was employed within the governments 36 month claim period they have deemed that the majority of his income comes from employment and not self employment so he’s entitled to nothing. Can’t get any of the grants available so has been placed on UC at about £40 a week. He’s now depleted all of his savings...
To go from about £5k a month (before tax and expenses etc.) he is now on £160 a month.
She's getting £54 a month.
haha
If I had a £1m turnover selling 10,000 things at £100 and make say £10 per item, I'd make £100,000 profit. If I then save £36K (or £43K) per annum thanks to a 15% VAT and nowt else then I'd be ower the moon as I'd then make £136K profit which is over a 30% increase!
Yes on annualised gross sales of £1m the difference would be 696.77 per week.
haha
If I had a £1m turnover selling 10,000 things at £100 and make say £10 per item, I'd make £100,000 profit. If I then save £36K (or £43K) per annum thanks to a 15% VAT and nowt else then I'd be ower the moon as I'd then make £136K profit which is over a 30% increase!
Not read the earlier posts so I might have missed something..
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