The vat reduction will help people thinking about big projects that are properly thought through, maybe even accelerate their timing. Things like household improvements, building work, the farming community, the food producing community, anyone looking at investing in serious capital equipment. Start up businesses who are investing serious amounts of cash in development. Maybe even the new website development where the trader isn't vat registered as they haven't yet started trading.
It won't really help anyone who's looking to buy a DVD, a website, or a tin of beans.
Which particular group of people are better placed to inject money into the economy?which group are most likely to take on an additional employee? Which partic group are maybe likely to help a small business survive the recession.
OK, it's not a quick fix, it's not an extreme reduction that's going to make people rush out and spend, but then the banks aren't lending anyway, so it's really only looking to help the people who have the finances to spend, and maybe encourage them to spend it now rather than wait and see six months.
These are very enlightening threads to read. I think it explains why UKBF doesn't have an economics and politics forum. Lots of the posters here are so preoccupied by the "amount of time & hassle" they can't get past that. Can't think about the impact on any business or industry other than their own.
I used to be an auditor, and I saw the amount of hassle caused when the vat rate was reduced from 17.5% to 5% for electricity and gas. And I can tell you that it took a multi million pound company, a few days to change and reprogramme computer systems that were written in languages such as fortran, with hundreds of different categories of customers, and tariffs, to update billing systems, accounting systems, cms systems, in the days before one software package fitted all, for million and millions of account holders.
Now, if they can cope with it, i'm sure that britain's small businesses can get the pen out, cross through 17.5% on the preprinted paper and put 15%, make those small changes to the accounting systems that will probably take less than an hour, spend an extra hour or two on the next quarters vat return. Its not really looking like adding "millions of pounds of costs" to small businesses to me.
It sounds like a load of old whinging to me.
(i will now retreat and borrow one of estwigs hard hats!)
