[Politics] VAT

Creaky said:

Is that really so or is that just the case for middle income families? I would have thought the poorer families spend a higher proportion of their income on VAT exempt items such as food, housing and children’s clothing.

I agree that wealthier families don’t spend as much of their income as poorer families so don’t proportionally pay as much in sales taxes but they do eventually end up having to pay these when they do decide to spend or other taxes, often at higher rate if they don’t.

Returning to the system of purchase tax that was in force prior to the introduction of VAT would reduce company administration overheads, reduce the need for VAT inspectors and help reduce the estimated £1.5 billion losses due to fraud.

Click to expand...

Creaky said:

Is that really so or is that just the case for middle income families? I would have thought the poorer families spend a higher proportion of their income on VAT exempt items such as food, housing and children’s clothing.

I agree that wealthier families don’t spend as much of their income as poorer families so don’t proportionally pay as much in sales taxes but they do eventually end up having to pay these when they do decide to spend or other taxes, often at higher rate if they don’t.

Returning to the system of purchase tax that was in force prior to the introduction of VAT would reduce company administration overheads, reduce the need for VAT inspectors and help reduce the estimated £1.5 billion losses due to fraud.

Click to expand...

Weststander said:

Sage for example, just added a free module, allowing supporting electronic data to be filed with a VAT return. Other software suppliers did the same. In the end the scary/stressful change, no one likes change, wasn’t as bad as feared.

Plus all non-VAT registered businesses and all businesses with a turnover less than £85,001, could ignore MTD.

Click to expand...

Gazwag said:

Ok for those who were up to date (and had already paid plenty for) with sage what about the millions of small businesses who used spreadsheets or even still kept adequate well maintained and accurate hand written records.

Click to expand...

Weststander said:

For those with turnover up to £85,000, they could completely ignore the change. Scare stories amongst whingers and a shite stirring general media, led to unnecessary worry.

For VAT registered businesses above that, they did need to digitise their underlying VAT records. That could be a spreadsheet and then using software to upload it to HMRC each quarter.

We were warned about MTD years ago and it was delayed by a year to help. I suppose things move on. HMRC can now review the accuracy and truth of the raw data, from afar.

Click to expand...