VAT reduced to 15% on purchases.

[JohnDotCom]

In case you hadn't heard VAT will be reduced by 2.5% to 15% as a Temporary measure on Sales and Services.
Top rate tax for those earning over £150,000 will rise 5% to 45% if they get back into power.

Taxes for everyone will have to rise to pay for these cuts once recession ends.

It is not known at present the new price for Diesel and Petrol Fuel?

[desperado]

i take it petrol and diesel are vated john

[payner75t]

petrol/deisel are still going to be vatted at 17.5% and he is adding 2p to a litre now and 1.84p in april!!!

[tourerfogey]

What about businesses using the 'flat rate' VAT scheme - will their flat rates be adjusted so that they too can benefit or will they miss out?

[geoff11]

The Vat rate used to be 15 % it was put up if I remember correctly by the conservatives , after they scrapped the poll tax as then the council tax was a fairer ammount than what it is now, so I guess I will be charging my customers 2.5% less which will be good news for them

[tourerfogey]

The Poll tax was the Conservatives biggest mistake - the mistake wasn't introducing it, the mistake was that they didn't (couldn't) stick with it.

(Controversial, I know)

I also suspect that some smaller shops will not reduce their prices - just adjust the base price so that with the new rate of VAT the total price will be the same as before and pocket the difference. . .

Anyway - can anyone answer my 'flat rate' VAT question ?

[tourerfogey]

OK, having been to the HMRC website I can now answer my own questions:-

The lower rate on domestic fuel remains unchanged

Businesses are 'encouraged' to pass on the effect of the new rate to their customers but are not compelled to do so . . .

And the various payment rates for businesses on the 'Flat Rate' scheme are also changing to reflect the new standard rate.

[Ken]

VAT replaced the old purchase tax many years ago. It came in at 8% at first but soon started to creep up as it was an easy tax to manage

[Duotone]

Originally Posted by payner75t

petrol/deisel are still going to be vatted at 17.5% and he is adding 2p to a litre now and 1.84p in april!!!

VAT on fuel has been reduced to 15% but fuel duty has been increased, so the total rate of tax on fuel [vat + fuel duty] will remain the same.

Result. there should be no change in the price of fuel due to this budget..

Dave T

[JohnDotCom]

As stated Fuel prices will rise according to the AA by approx 2p a litre at most stations???

National Insurance Contributions will go up for EVERYONE as way to recover and pay for the Decreases
and Increases in Child Benefit and Pensions being introduced 3 months early.
Tax Credits will also increase slightly.
A extra £60 will be paid to all pensioners in January on top of the £10 Christmas Payment.

It is not a requirement for VAT decreases to be passed on But VAT Receipts must show 15% but the price can be left the same.

Fuel for Heating etc is only at VAT of 5% so will be unaffected.