Reply to: If VAT rate changes

[dang65]

Something to do with the spin of the Earth. Like the way toilets work backwards in Australia.

Which any self-respecting geek would know is an urban myth, of course.

[Assuming you're referring to water spinning in different directions. For all I know, toilets may well "work backwards" in Australia. Doesn't sound very pleasant though if they do.]

[lambrini_socialist]

From reading the published report, it looks like HMRC are going to reduce the flat rate scheme sectoral rates.

4.12 The VAT Flat Rate Scheme allows businesses with a turnover less than £150,000 to simplify their VAT accounting.
Alongside the temporary reduction of the standard rate of VAT, the Government will also amend the sectoral rates of the VAT Flat Rate Scheme in line with the standard rate reduction, allowing 180,000 small businesses in the scheme to benefit from the rate reduction

Although no mention of timescales.

Cheers,
GA

i love your records Grievous Angel

[GrievousAngel]

Keep up - http://forums.contractoruk.com/gener...-ammended.html

[TheFaQQer]

Keep up - http://forums.contractoruk.com/gener...-ammended.html

[GrievousAngel]

From reading the published report, it looks like HMRC are going to reduce the flat rate scheme sectoral rates.

4.12 The VAT Flat Rate Scheme allows businesses with a turnover less than £150,000 to simplify their VAT accounting.
Alongside the temporary reduction of the standard rate of VAT, the Government will also amend the sectoral rates of the VAT Flat Rate Scheme in line with the standard rate reduction, allowing 180,000 small businesses in the scheme to benefit from the rate reduction

Although no mention of timescales.

Cheers,
GA

[kryten22uk]

-deleted-

[expat]

...Please don't me that some systems have the Vat Rate hardcoded in ?

That doesn't make sense, and any programmer who hardcoded such a variable figure needs to be shot for idiocy.

Absolutely. Even back in the 1970s (yes) when programming was real work and memory cost money, we coded at least 6 VAT rate codes into every program.

VAT-free
0% (same result as above but legally different)
low rate
high rate
+2 more because you never knew what the govt would do.

[manstein]

Are you Jonafon Woss?

I need to do something to fill up my 3 months and I'm sure BT are monitoring my phone.

[Peoplesoft bloke]

.............
Am I the only one who thinks it strange that one of the central planks of government policy to get us out of a hole of our own making by overbowering .......

Are you Jonafon Woss?

[manstein]

I always thought the FRVS was set at a certain figure per industry / profession so that you could forego the hassle of the more complicated claiming back system.

So, for example, a farmer may be on 7% FRVS as you would expect him to have a lot of stuff to claim back, whereas an IT professional may be on 13% as he would have less to claim.

I can't see how the government can justify cutting the base rate of VAT without making a commensurate cut in our FRVS or it would make a mockery of the raison d'etre of the whole scheme.

So I conclude there will definitely not be any reduction in our registered Flat Rate, so looks like we will lose 1-2% of our income.

Am I the only one who thinks it strange that one of the central planks of government policy to get us out of a hole of our own making by overbowering is to give incentives to spend more (for a lot of people most probably on credit cards with huge interest rates)?

I can understand tax cuts but not a cut on VAT, which will save a little on fuel bills (which rose 35% this year?) and other essentials (is the other main outgoing food still 0% rated, and I don't think we pay VAT on other main expenditure mortgage?) but I can't really see this saving people money.

Just heard on the radio Canada tried a similar thing earlier this year and it failed miserably.

[Purple Dalek]

I don't think he has thought it through.

NSS

[NickFitz]

...when has this rate changed before now?

The 17.5% rate was introduced in 1991; before that it had been at 15% since 1979. Before 1979 it was 8% for most goods and services, and 12.5% for "luxury" items.

(There have also been changes to what is and is not covered by the Zero Rate band.)

[lambrini_socialist]

caveat - i understand economics like DimPrawn understood climate science...

assuming the FRS stays the same and VAT is cut, i can't say i'll be overjoyed but it does make a certain amount of sense, as it means that some of the cost of the VAT cut will be absorbed by well-paid IT contractors and other folks with similar arrangements. the only way for us to get any benefit from the cut is to get out on the high street with our contractor wodges and spend like mad on consumer electronics and suchlike....not putting it through as a business expense of course. and of course, an outbreak of high-street splurging is exactly what's needed (it says here) to sort out the current problems.

[Zakalwe]

Like the way toilets work backwards in Australia.

That sounds messy :/

If the VAT reduction does make the FRS less attractive, what does switching back to 'normal' VAT accounting involve?

[VectraMan]

I thought that its value varied in different countries.

Something to do with the spin of the Earth. Like the way toilets work backwards in Australia.