Entrepreneurs demand VAT threshold hike to help them through the recession

Discussion in 'Press Releases' started by DanMartin, Apr 16, 2009.

  1. DuaneJackson

    DuaneJackson UKBF Legend Full Member

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    The consumer - Joe Bloggs in the street - doesn't get to claim anythign back. It's him utlimately that pays the tax.
     
    Posted: Apr 20, 2009 By: DuaneJackson Member since: Jul 14, 2005
    #21
  2. Mattonella Tile Studio

    Mattonella Tile Studio UKBF Ace Free Member

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    I'd agree with you in the main, but you've still got to know the VAT rules to input the primary source into the accounts package. Garbage in, garbage out scenario.
     
    Posted: Apr 20, 2009 By: Mattonella Tile Studio Member since: Jun 10, 2008
    #22
  3. elainec100@cheapaccounting

    [email protected] UKBF Newcomer Full Member

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    Duane

    With all due respect you are in an easy industry for vat and the rules are straight forward. The hassle is in understanding some of the rules e.g. rules for certain supplies etc. Take a retail outlet - there are some strange rules on vat.
     
    Posted: Apr 20, 2009 By: [email protected] Member since: Nov 4, 2005
    #23
  4. elainec100@cheapaccounting

    [email protected] UKBF Newcomer Full Member

    13,267 2,882
    OK you bet me to it
     
    Posted: Apr 20, 2009 By: [email protected] Member since: Nov 4, 2005
    #24
  5. elainec100@cheapaccounting

    [email protected] UKBF Newcomer Full Member

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    James

    I look forward to your petition to support your favoured system - happy to sign it (if I agree of course). :p
     
    Last edited: Apr 20, 2009
    Posted: Apr 20, 2009 By: [email protected] Member since: Nov 4, 2005
    #25
  6. DuaneJackson

    DuaneJackson UKBF Legend Full Member

    9,523 1,118
    I'm in virtually *every* industry as far as VAT is concerned. Our software has to deal with it all (apart from some of the more obscure stuff like second-hand scheme).

    Yes. I accept there is some question over various supplies, but once you've answered that question once via your accountant or whatever then it's answered.

    I still mantain that the month to month administrative "burden" of being VAT registered is virtually non-existent for the vast majority of businesses in the UK that use decent software.

    I don't want to take this thread too off-topic, so let's just agree that I'm right and we'll leave it there : )
     
    Posted: Apr 20, 2009 By: DuaneJackson Member since: Jul 14, 2005
    #26
  7. elainec100@cheapaccounting

    [email protected] UKBF Newcomer Full Member

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    What would be the point of responding :|:|:|:|
     
    Posted: Apr 20, 2009 By: elainec[email protected] Member since: Nov 4, 2005
    #27
  8. DuaneJackson

    DuaneJackson UKBF Legend Full Member

    9,523 1,118
    Thank you! Now if only my wife would see it that way too then the world would be a better place :)
     
    Posted: Apr 20, 2009 By: DuaneJackson Member since: Jul 14, 2005
    #28
  9. Christiane

    Christiane UKBF Ace Free Member

    1,829 215
    Maybe we should have had a poll on this topic, because I too disagree raising the VAT threshold will help small businesses, for reasons mentioned by James and others.

    I think there would be far better ways to help small businesses.
     
    Posted: Apr 20, 2009 By: Christiane Member since: Dec 3, 2006
    #29
  10. elainec100@cheapaccounting

    [email protected] UKBF Newcomer Full Member

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    There was a poll some time ago.

    Have a search and you should be able to find it - I started the thread back then.
     
    Posted: Apr 20, 2009 By: [email protected] Member since: Nov 4, 2005
    #30
  11. graemepirie

    graemepirie UKBF Newcomer Free Member

    294 47
    The proposal was a sliding scale in VAT payable to HMRC (I'm assuming the OP meant that VAT is still charged at the normal rate, but then less is paid to HMRC - which is how the flat rate scheme works).

    This solves the issue for businesses dealing with the public who in many cases have to swallow the cost of VAT, but creates additional profit for B2B companies who can charge VAT on top - as the customer can claim it back.

    It's a good example of how complicated a high threshold makes the VAT process.
     
    Posted: Apr 21, 2009 By: graemepirie Member since: Jun 19, 2008
    #31
  12. graemepirie

    graemepirie UKBF Newcomer Free Member

    294 47
    But - that's what the flat rate scheme is there for. There's really zero admin associated with it - just the pain of writing the cheque!
     
    Posted: Apr 21, 2009 By: graemepirie Member since: Jun 19, 2008
    #32
  13. graemepirie

    graemepirie UKBF Newcomer Free Member

    294 47
    Although I'm a "dissenter" regarding raising the threshold, I do understand why the topic has been raised. The VAT rules are a significant barrier to growth for small businesses. I think it's one of these situations where something that was supposed to help (high threshold) has created an unforseen complication far worse that leaving the threshold low. Very typical of our 10,000 pages of tax rules & a great example of why we should have flat taxes & simplification.

    I agree something needs done about it - just not with the proposed solution!

    If anyone feels like taking up some other issues - lets get the corporation tax rises reversed or employers NI abolished..... It would be nice to be able to grow a business & employ people for our own benefit rather than for Brown to waste!
     
    Posted: Apr 21, 2009 By: graemepirie Member since: Jun 19, 2008
    #33
  14. Zeno

    Zeno UKBF Newcomer Free Member

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    This is one area that I disagree with. I don't believe that the FRS presents any reduced administration time for the majority of those using it if you take into account they still need to maintain records for accounting purposes.
     
    Posted: Apr 21, 2009 By: Zeno Member since: Jun 12, 2008
    #34
  15. Mattonella Tile Studio

    Mattonella Tile Studio UKBF Ace Free Member

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    No, my proposal was that a sliding scale of VAT was charged, to ease the 'price increase' to the consumer when a business is growing. So instead of going from charging £100 to £115, they would go from £100 to £105 (assuming first sliding scale was 5%).
     
    Posted: Apr 21, 2009 By: Mattonella Tile Studio Member since: Jun 10, 2008
    #35
  16. openmind

    openmind UKBF Big Shot Full Member - Verified Business

    4,755 867
    I agree with some of the comments on here that raising the threshold is pointless. It will benefit a minority not the majority.

    Either reduce the threshold to zero and streamline it with less rules, caveats, loopholes and more simplicity or bin it all together...
     
    Posted: Apr 21, 2009 By: openmind Member since: Sep 6, 2005
    #36
  17. graemepirie

    graemepirie UKBF Newcomer Free Member

    294 47
    An interesting proposition but sounds very complicated...

    As far as the consumer was concerned he'd have the option of going to a small supplier & paying say 5% VAT, where the big company would charge 15% VAT. Good for small businesses!

    However, lets for a minute say the scale is £20K = 5%, 40K = 10%, 60K = 15%....

    What would happen when the company grew to 60K - would ALL sales be charged at 15%? If so then that's no different to the situation now. If not then how would you account for (& charge) the right level of VAT?

    I can also see an issue being that it would result in lots of new registrations having much higher output VAT than input & therefore able to claim back each month. Probably not welcomed by the treasury!

    The other issue is that the UK gov cannot change VAT rates without getting permission from the EU.
     
    Posted: Apr 21, 2009 By: graemepirie Member since: Jun 19, 2008
    #37
  18. Mattonella Tile Studio

    Mattonella Tile Studio UKBF Ace Free Member

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    Yes.

    My idea (and I'm not 100% sure how it would work) is that you get rid of the big jump from no VAT to 15% when this threshold is crossed currently. Using your figures, at £59,999 you're charging 10% (as opposed to 0% now), so it's not going to be such a bind to jump into the 15% threshold.

    I'm just looking for a way to encourage people to cross the divide.
     
    Posted: Apr 21, 2009 By: Mattonella Tile Studio Member since: Jun 10, 2008
    #38
  19. graemepirie

    graemepirie UKBF Newcomer Free Member

    294 47
    So you would force registration at a much lower level?

    That would work for me - but I'd suggest that rather than fiddle round with the VAT charged, the rate is left as it is, but the flat rate scheme is amended to the same sort of sliding scale eg at year end 0-20K @ 3%, 20-40K @6%, 40-60K @ 9% & 60K+ @11%.

    The reason I say limit it to the flat rate scheme is that it would ensure there was no unfair gain for those who can genuinely add VAT to their prices - and it would avoid the opportunity for even more fraud.
     
    Posted: Apr 21, 2009 By: graemepirie Member since: Jun 19, 2008
    #39