Ummm.
He's borrowing (from us) to give us some money to spend now, and we'll have to pay it back later, with interest. In other words, he's acting like a dodgy credit agency.
A Robin Hood budget..at last.
I've always had faith in Gordon.
I'm miffed now that I didn't vote in this government (I abstained), but I hated Tony Blair.
Ummm.
He's borrowing (from us) to give us some money to spend now, and we'll have to pay it back later, with interest. In other words, he's acting like a dodgy credit agency.
So does any one think the cost of ceroc class is going to drop to £6.82
Does anyone else think that a 2.5% reduction in VAT equals a 2.5% increase in profits for most retailers?
I'd rather he cut income tax and/or increase the tax-free allowance.
Can someone tell me when the actual difference between income tax and national insurance is?? Apologies for my ignorance.
Let your mind go and your body will follow. – Steve Martin, LA Story
For a minute I thought he'd resigned.
In what way is this a Robin Hood budget? Was Robin in the habit of saying to the poor "look, here's a wee bundle of stuff I've nicked from the rich, but remember that within the next 2 years I'll be stiffing you for another few quid a month. Oh, and yes I know I'm not going to cream off so much from the stuff you buy for a year, but I can't guarantee the shopkeepers will pass on the reduction."
You find me the shops where they start charging £9.78 instead of £9.99, and I might start agreeing with the idea that Gordon Brown's some sort of hero.
Basically you pay NI to an upper limit via PAYE to just under 30K I think, if you own you own bus. (like me) you don't pay it on 95% of your income.
So basically the average working man will pay back the VAT increase not ME!
So it's not really that good for the average working man at all. Nice one Gorden fool every one again!
At the risk of being shot down, not everyone who earns a lot of money (and therefore already pays a larger actual amount of cash into the coffers) is bad/evil and therefore deserves to end up paying an even higher % to the government. And I'm not one of those who'll be hit by the 45% tax post election if labour remain in, but it's just one of those things that winds me up that people can't necessarily help it that they earn more money.
(left the building under cover!)
Sad thing is not many high earners will pay it. For example i wonder how much the charman of say Barclaycard will pay in tax.
I understand his basic wage is under the £150k band the rest is 'share options' worth Millions per year based on performance. The share option scheme is on in a share option scheme and therefore he will not pay tax on it at all!
Very few people earn as a wage over 150k and those who have incomes in tax bracket have very good accountants, so will find way to avoid most of it.
Exactly -
It'll cost the shops a lot of money to re-price everything - a cost which they will need to retrieve, - from you, - so it'll be a good few months before you see any price reduction, - if at all.
Essential items such as food you don't pay VAT on anyway!
One thing you can be sure of though - is when they add back the 2.5% back on VAT, - you'll DEFINITELY see a price increase!!
Why not just reduce income tax and make it nice and simple?
It's the most ridiculous idea and will make us worse off in the long run.
Makes a good headline in the papers though, - I'll give the Government that
um is gordon brown still the chancellor of eh exchequor i thought it was alistair darling
having said that they are going to be taking it all back in fuel duty anyway
What exactly is the point of Alistair Darling? I can't remember a less significant UK Chancellor since John Major's brief stint.
Indeed. And Alcohol/Tobacco duties have also been raised to offset the VAT drop, although it seems the Government's been doing a bit of creaming off at the top itself here. Wonder if those rises will be taken off when VAT rises back to 17.5%?
Let your mind go and your body will follow. – Steve Martin, LA Story
He's making lots of work for accountants and IT people - all these legacy systems & calculators that have 17.5% built in as a default... Perhaps all the manufacturing jobs that are going could re-train?
VAT
VAT is payable on lots of types of food, there was a famous case in tax law over whether Jaffa Cakes are cakes or chocolate dipped biscuits.
National Insurance
In the simplest case, you pay 11% on earnings £5k to £35k and 1% above £35k, possibly rising to 11.5%/1.5% after the next election. Being self employed is definitely not a simple case. There are many cases where you pay income tax or NI, but not both.
Simplification
Past chancellors have suggested bringing IT and NI into line, but it would be a massive headache as there are so many special interest groups. Simplifying VAT would be even trickier.
Do you fancy paying VAT when you buy a house?
When I studied such things (long ago) VAT was described as being a regressive tax because those on low incomes paid a higher % of their income as VAT (not at the point of income, clearly, but when they buy things) than those on higher incomes. This is likely to be true of any tax on purchasing unless the tax is targeted at expensive luxury items.
Therefore reducing VAT and adding a higher band on income tax is redistributive from rich to poor and moves the tax structure to being more progressive. Progressive in this sense means that the proportion of tax taken increases as someone gets paid more.
In that sense the budget could be described as having a "Robin Hood" element although I think that is overstating what has happened. The tax system is a little more progressive after the budget than before.
But the intricacies of the tax system still fail to compensate for the ridiculous approach underlying this budget - the country is into the red by many billions, businesses are going under every day, and our Prime Minister is telling us all to go and spend all the money we have left to "revive the economy" - now where do you think that money is going to end up? Certainly not in the hands of the poor. Brown was the man in charge of the country's coffers for several years and this is the result - aided and abetted by a much wider economic problem, granted, but if he hadn't borrowed so much in the first place, and hadn't had to because he'd spent so much on white elephants, then we wouldn't be in nearly such a deep pile of doo-doo. And he has openly said that lowering taxes now means we will have even more to pay him back - after he was the one who wasted and squandered our tax money in the first place - in the years and decades to come. It makes no sense.
And there was I thinking that it was a sarcastic thread title. At least most people don't seem to be fooled.
I bet Tesco are laughing though, just what they need to finish off more of the small shops.
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