Darling cuts VAT in pre-Budget

Chancellor Alistair Darling has cut VAT from 17.5% to 15% in his pre-Budget report as part of an £20bn package aimed at kickstarting the UK economy.

And duties on alcohol, tobacco and petrol will rise so the price remains at their current level. - OMG NOOOOOOOO! :@

Don't bother go out this week thinking you will find any "great deals" because you want see any to next monday - Thats when the VAT goes to 15% also retailers might not even pass on the cut to the customers so it's best not to get too hyped up about it yet.

http://news.bbc.co.uk/1/hi/uk_politics/7745340.stm

OMG, NOT DRINKS

OMG OMG OMG OMG

WHEN DOES THIS GO ON EFFECT?

OMG, IT BETTER BE TILL AFTER THE WEEKEND

OMG

I KICK HIS FRIGGIN ARSE IN

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Originally Posted by Clowgon

Chancellor Alistair Darling has cut VAT from 17.5% to 15% in his pre-Budget report as part of an £20bn package aimed at kickstarting the UK economy.

And duties on alcohol, tobacco and petrol will rise so the price remains at their current level. - OMG NOOOOOOOO! :@

Don't bother go out this week thinking you will find any "great deals" because you want see any to next monday - Thats when the VAT goes to 15% also retailers might not even pass on the cut to the customers so it's best not to get too hyped up about it yet.

http://news.bbc.co.uk/1/hi/uk_politics/7745340.stm

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retailers HAVE to pass the cut on from VAT but they could increase their price.

It just means companys have to spend thousands on producing new catalogues, update website etc.

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Originally Posted by Sc0tteh

retailers HAVE to pass the cut on from VAT but they could increase their price.

It just means companys have to spend thousands on producing new catalogues, update website etc.

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Yer, so places like Makro that display it plus 17.5% will now seem cheaper.
Although not on drink or tobacco

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Originally Posted by Sc0tteh

retailers HAVE to pass the cut on from VAT but they could increase their price.

It just means companys have to spend thousands on producing new catalogues, update website etc.

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oO. So present catalogues from next week are pretty much useless?

Edit: Pensioner's will get a one off payment of £120.00 = Couples
Pensioners's who are single will get £60.00 (One off Payment)

Yep since VAT has changed every price will change.

Also for rich people (can't remember if its 120k or 150k income yearly) income tax is going up from 40% to 45%

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Originally Posted by Sc0tteh

Yep since VAT has changed every price will change.

Also for rich people (can't remember if its 120k or 150k income yearly) income tax is going up from 40% to 45%

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Its. 150k. The rich wont like it but I'm sure they'll get over it. :P

I'm sure you'd bother if you were giving £450,000 of your £1,000,000 salary to the government :P

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Originally Posted by Sc0tteh

I'm sure you'd bother if you were giving £450,000 of your £1,000,000 salary to the government :P

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Well, i suppose. :P

Isn't income tax for low earners going down aswell, as its going to 6k to have to pay or something? can't remember, read it this morning.

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Originally Posted by Sc0tteh

Isn't income tax for low earners going down aswell, as its going to 6k to have to pay or something? can't remember, read it this morning.

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Yeah thats right. So theres quite a few benefits for people out of this.
Shame on these rich ******** who don't donate to charity.

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Originally Posted by Clowgon

Yeah thats right. So theres quite a few benefits for people out of this.
Shame on these rich ******** who don't donate to charity.

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What exactly does charity have to do with this? No one has to donate to Charity first of all, and there's such a range of Charity's, they're not all out there to help lower earners :S

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Originally Posted by Sc0tteh

I'm sure you'd bother if you were giving £450,000 of your £1,000,000 salary to the government :P

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Yeah, you wouldn't be able to pay for photoshop so you would have to get it from the pirate bay.

Isn't the next fear, them raising the VAT to something like 18% in a few years time?

It probably will, but in the time it raises we won't be in recession or any economic crisis's :P

Lol at the kids who aint even 18 yet, moaning about how drink is going to cost... the same.

ITT, a bunch of not-quite-grown 13 year olds.

Couldn't care more about the VAT cut, he's putting taxes up.

Id usually welcome a 2.5% cut on VAT but it really hurts the economy more.....

1) 2.5% is literally nothing.... 22p knocked off a cd worth £9.99, wow its alot of money isnt it?

2) thousands will now have to be spent on advertisements by businesses, such as catalogs, posters and price tags etc to incorporate the new prices...

3) people will be spending LESS, as if i would really go out and buy another CD worth £9.99 to save 22p? ... theres alot of things i could spend that 22p on isnt their?

4) Its only for 1 YEAR! so in otherwords... within 1 year VAT will be back at 17.5%... great thousands completely wasted on advertisements etc... just to be wasted again?

5) the EU.... yes this debate again.. why wasnt the VAT cut any further? because the EU wont permit a VAT rate of less than 15%

so in the end... its an utterly completely waste of time and money......

One more thing... brown could call an election early next year... but he wont... oh great the next one will be in 2010, thats another whole 18months the labour government has to wreck our country... its only the conservatives which will be left with the clean up... as lets face it... who would vote labour again?

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Originally Posted by Rapidshare

OMG, NOT DRINKS

OMG OMG OMG OMG

WHEN DOES THIS GO ON EFFECT?

OMG, IT BETTER BE TILL AFTER THE WEEKEND

OMG

I KICK HIS FRIGGIN ARSE IN

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Alcohol tax already went up a few months back on spirits and it wasn't all that noticeable. Also they won't be changing much if at all - the alcohol duty is going up because the VAT is going down, so the prices should stay about level.

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Originally Posted by GommeInc

Isn't the next fear, them raising the VAT to something like 18% in a few years time?

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I reckon so, and it'll be justified by this temporary measure somehow

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Originally Posted by Pyroka

Lol at the kids who aint even 18 yet, moaning about how drink is going to cost... the same.

ITT, a bunch of not-quite-grown 13 year olds.

Couldn't care more about the VAT cut, he's putting taxes up.

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+1

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Originally Posted by jam666

2.5% is literally nothing.... 22p knocked off a cd worth £9.99, wow its alot of money isnt it?

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2.5% is a massive amount when you're talking about a country worth billions and billions lol. Also consider if your example how many CDs are bought weekly - some artists alone sell near or over a million

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Originally Posted by jam666

who would vote labour again?

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Poor people lol

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Originally Posted by GommeInc

Isn't the next fear, them raising the VAT to something like 18% in a few years time?

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This country is ****

What a mess this country is in. Reducing VAT for 13 months isn't going to go a long way. We will all pay the price for this eventually. Big retailers have already slashed prices by 20 and 25% in an effort to attract customers.

They charge way too much for taxes already... if they do rise in the future then people won't be happy... they should have put some of the billions they collected from tax payers aside for something like this, but they didn't. Cutting VAT won't have much of an effect.

They need to charge for taxes, if they didn't get revenue you'd have to pay for public goods such as NHS, street lighting and so on, the government don't even get enough in taxes to afford their expenditure.

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Originally Posted by Jordy

What exactly does charity have to do with this? No one has to donate to Charity first of all, and there's such a range of Charity's, they're not all out there to help lower earners :S

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Lol i got a bit carried away there. :$

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Originally Posted by jam666

Id usually welcome a 2.5% cut on VAT but it really hurts the economy more.....

1) 2.5% is literally nothing.... 22p knocked off a cd worth £9.99, wow its alot of money isnt it?

2) thousands will now have to be spent on advertisements by businesses, such as catalogs, posters and price tags etc to incorporate the new prices...

3) people will be spending LESS, as if i would really go out and buy another CD worth £9.99 to save 22p? ... theres alot of things i could spend that 22p on isnt their?

4) Its only for 1 YEAR! so in otherwords... within 1 year VAT will be back at 17.5%... great thousands completely wasted on advertisements etc... just to be wasted again?

5) the EU.... yes this debate again.. why wasnt the VAT cut any further? because the EU wont permit a VAT rate of less than 15%

so in the end... its an utterly completely waste of time and money......

One more thing... brown could call an election early next year... but he wont... oh great the next one will be in 2010, thats another whole 18months the labour government has to wreck our country... its only the conservatives which will be left with the clean up... as lets face it... who would vote labour again?

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It all adds up though. 22p becomes 44p if you buy 2 CDs. Buying loads of DVDs will even add up, but businesses will either keep their prices the same, lower them, or raise them depending on how badly they've taken it :P

Heck, you notice the differences more if you buy something like a car!

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Originally Posted by GommeInc

It all adds up though. 22p becomes 44p if you buy 2 CDs. Buying loads of DVDs will even add up, but businesses will either keep their prices the same, lower them, or raise them depending on how badly they've taken it :P

Heck, you notice the differences more if you buy something like a car!

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Every little helps! :P

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Originally Posted by GommeInc

It all adds up though. 22p becomes 44p if you buy 2 CDs. Buying loads of DVDs will even add up, but businesses will either keep their prices the same, lower them, or raise them depending on how badly they've taken it :P

Heck, you notice the differences more if you buy something like a car!

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Can't really raise them, as if the price is price elastic then a change in price would mean the amount in demand would fall more than they'd gain in cash, so ultimately they'd lose more, as theres plenty alternative for most things out there.

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Originally Posted by Sc0tteh

Can't really raise them, as if the price is price elastic then a change in price would mean the amount in demand would fall more than they'd gain in cash, so ultimately they'd lose more, as theres plenty alternative for most things out there.

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You sound like your reading out of a business studies book. Price elasticity has very little to do with tax cuts and the economy.

I think people are looking into abit too much. The way i see it, the increase in income tax isn't going to have that much of an effect on anyone, the rich people aren't suddenly stop buying because they're earning 7k less a year. And a cut in VAT will be good for consumer confidence, i think it's a step towards increasing consumption even if it doesn't have a massive impact, i think it's a good move.

And i don't understand why people are moaning about it POSSIBLY only being for a year?

It's a fact that in most cases you don't see the outcome of economic policies until 2-3 years after they've been made. I highly doubt the conservatives will do any better.

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Originally Posted by Ramones

You sound like your reading out of a business studies book. Price elasticity has very little to do with tax cuts and the economy.

I think people are looking into abit too much. The way i see it, the increase in income tax isn't going to have that much of an effect on anyone, the rich people aren't suddenly stop buying because they're earning 7k less a year. And a cut in VAT will be good for consumer confidence, i think it's a step towards increasing consumption even if it doesn't have a massive impact, i think it's a good move.

And i don't understand why people are moaning about it POSSIBLY only being for a year?

It's a fact that in most cases you don't see the outcome of economic policies until 2-3 years after they've been made. I highly doubt the conservatives will do any better.

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I'm not talking about tax, as if you read my post i clearly stated raising prices.

The previous poster said firms could raise price to earn more money due to the fact of them losing money from sales and such.

As for income tax it isn't happening to 2011 if i remember correctly.

I don't do business studies :)

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Originally Posted by Sc0tteh

Can't really raise them, as if the price is price elastic then a change in price would mean the amount in demand would fall more than they'd gain in cash, so ultimately they'd lose more, as theres plenty alternative for most things out there.

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actually it all depends on how elastic the product is. the more inelastic something is (like bread) then very little change will happen to the demand. and vice versa for being elastic.

EDIT: oh nm thats what i put, i dunno what i was thinking :S :P

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Originally Posted by Ramones

You sound like your reading out of a business studies book. Price elasticity has very little to do with tax cuts and the economy.

I think people are looking into abit too much. The way i see it, the increase in income tax isn't going to have that much of an effect on anyone, the rich people aren't suddenly stop buying because they're earning 7k less a year. And a cut in VAT will be good for consumer confidence, i think it's a step towards increasing consumption even if it doesn't have a massive impact, i think it's a good move.

And i don't understand why people are moaning about it POSSIBLY only being for a year?

It's a fact that in most cases you don't see the outcome of economic policies until 2-3 years after they've been made. I highly doubt the conservatives will do any better.

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it does have some degree of a relation to elasticity. If the products elastic then the VAT means more will be demanded. I agree the VAT cut will only boost confidence and should result in a recession which should be mildly better. Taxes arent too high as well? i cant remember who said that. You need the taxes for everything! NHS, education, police, Public goods. Think about it, either you pay for every single merit good or pay 17.5% on everything and income tax which will probably be less than what it would be if you paid for the NHS, education etc privately. trust me, its better this way than what america do.

Quote:

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Originally Posted by Sc0tteh

I'm not talking about tax, as if you read my post i clearly stated raising prices.

The previous poster said firms could raise price to earn more money due to the fact of them losing money from sales and such.

As for income tax it isn't happening to 2011 if i remember correctly.

I don't do business studies :)

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So basically your post had no relevance to anything? Some firms will be able to raise prices because they're inelastic, and some wont because they're elasitc. Well done on teaching us all about elasticity.

it's not really like its that much of a tax increase as you only pay 45% on whatever you earn over 150k.

Its not like at 149k you have more money than when you earn 151k (if that makes sense) because you are only taxed 45% on what you earn OVER 150k.

You get the first 6k Tax-Free.

So if you earn 1million you dont pay 450k. You pay a fair bit less.

a

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Originally Posted by Ramones

So basically your post had no relevance to anything? Some firms will be able to raise prices because they're inelastic, and some wont because they're elasitc. Well done on teaching us all about elasticity.

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And alot of people don't study economics type subject, so epic failz at you.

My post had relevance to the person who posted it ;)

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Originally Posted by jam666

Id usually welcome a 2.5% cut on VAT but it really hurts the economy more.....

1) 2.5% is literally nothing.... 22p knocked off a cd worth £9.99, wow its alot of money isnt it?

2) thousands will now have to be spent on advertisements by businesses, such as catalogs, posters and price tags etc to incorporate the new prices...

3) people will be spending LESS, as if i would really go out and buy another CD worth £9.99 to save 22p? ... theres alot of things i could spend that 22p on isnt their?

4) Its only for 1 YEAR! so in otherwords... within 1 year VAT will be back at 17.5%... great thousands completely wasted on advertisements etc... just to be wasted again?

5) the EU.... yes this debate again.. why wasnt the VAT cut any further? because the EU wont permit a VAT rate of less than 15%

so in the end... its an utterly completely waste of time and money......

One more thing... brown could call an election early next year... but he wont... oh great the next one will be in 2010, thats another whole 18months the labour government has to wreck our country... its only the conservatives which will be left with the clean up... as lets face it... who would vote labour again?

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I will, actually.

You quite clearly have no idea what you're talking about.

It isn't labours fault, it is simply a **** time........economies on a global scale are buggered, it isn't just ours. Our government are dealing with it well......they've already bailed out the banks (which HAD to be done - not the governments fault - but the fault of greedy, overpaid bankers), and now they're planning to cut the taxes on people earning less than 40K a year, therefore easing the financial burden on those who need it most.

Times are hard and the people on low incomes are the people that need the money most. True, those earning high wages will feel aggrieved at being taxed more, but they don't need that money to survive. They simply want that money to enrich their life.

Society is there to protect those who really need it, and the money should be distributed as such. That is what labour government is all about, and that is what they are trying to do.

They've cut VAT by over ten percent, which is significant. You're arguing about it and saying that the price of products haven't come down a great deal, but the price of VAT on a product was only 17.5 percent in the first place. If you want a noticable price cut then you should start asking questions of the retailer, not the government.


If elected, the conservatives will reduce taxing on the rich, cut spending on public services, and increase state spending. Taxes will not reduce, the poor will be poorly looked after, and our economy will be put into the hands of a party that has consistently failed in the past.


I'll be voting labour come the next general election, and I'm sure, that despite your nonsense statement, many others will be too.

This is awsome! I will be able to get my laptop I wanted with my own money!

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Originally Posted by Earthquake

This is awsome! I will be able to get my laptop I wanted with my own money!

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I ordered my new laptop the day before the budget announcement- dammit lol :(

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Originally Posted by Sc0tteh

And alot of people don't study economics type subject, so epic failz at you.

My post had relevance to the person who posted it ;)

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Your post had relevance to the person who posted it? So it had relevance to you? wow your clever.
And no your post wasn't correct, see my above for the real economics type answer ;)

Most retailers have price elastic demand as theres substritutes for most things

The post had relevence to the person which i was quoting, fool.

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Originally Posted by Sc0tteh

Most retailers have price elastic demand as theres substritutes for most things

The post had relevence to the person which i was quoting, fool.

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lol theres alot more to take into account than substritute ;) goods, stop thinking economic textbook and start thinking real life.

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Originally Posted by Sc0tteh

Most retailers have price elastic demand as theres substritutes for most things

The post had relevence to the person which i was quoting, fool.

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whats that bit mean?

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Originally Posted by Corporal

whats that bit mean?

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if a product is more elastic, then any change in price will affect demand by a huge amount. if it is more inelastic then if the price of the product changes then there will be a very little change in demand. Inelastic products tend to be goods which are necessary for living so petrol, bread etc. Elastic goods tend to have substitutes such as TVs and other electrical appliances