VAT in Britain Raised to 20% Next Year, Along With Other Financial Measures
85 replies, posted
[release]VAT is to rise from 17.5% to 20% in January after George Osborne unveiled the biggest package of tax increases and spending cuts in a generation.
He said his "tough but fair" Budget was "unavoidable" although he told MPs in the Commons there would be no extra tax on alcohol, tobacco and fuel.
Child benefit will be frozen for three years, public sector pay frozen and 25% cut from government department budgets.
Labour said the Budget was "reckless" and would "throw people out of work".
Acting Labour leader Harriet Harman said it would stifle growth and hit hardest "those who can least afford it".
But Mr Osborne laid the blame for the state of the nation's finances squarely at the door of the previous Labour government, saying: "The years of debt and spending make this unavoidable."
'Progressive budget'
He promised to balance Britain's books within five years - faster than Labour was planning, with the bulk of the savings to come from cuts to benefits and public services rather than tax increases.
He said action was needed to prevent a "catastrophic collapse" in economic confidence but stressed it would be done in a "fair" way with the better-off shouldering most of the burden.
"Everyone will pay something but the people at the bottom of the income scale will pay proportionately less than those at the top. This is a progressive Budget," he said to jeers from Labour MPs.
Tax credits will be cut for families earning more than £40,000 a year - and there will be a two year pay freeze for public servants paid more than £21,000, with those earning less all getting a £250 rise.
Mr Osborne also heralded swingeing cuts in public services by announcing departmental budgets - except health and foreign aid which are ringenced - which will see real terms reductions in their budgets of 25% over four years.
The full detail will not be revealed until Wednesday 20 October, when Mr Osborne publishes his spending review.
In addition to the VAT increase, which Mr Osborne said would raise £13bn a year, capital gains tax will be increased to 28% for top rate taxpayers - less than the 50% some Conservative backbenchers had feared.
And he ended his speech with a pledge to link pensions to earnings - or prices or 2.5% if they are higher.
In other moves, housing benefit will be reformed with a maximum limit of £400 a week, in a package saving £1.8bn a year by the end of the Parliament.
Other benefits to be cut include the health in pregnancy grant while the Sure Start maternity grant will be restricted to the first child only and lone parents will be expected to look for work when their youngest child goes to school.
Bank levy
But there will be an extra £150 a year for the poorest families, through changes to family tax credits to ensure, Mr Osborne said, child poverty reduction targets would be met.
The government is also to introduce a medical assessment for Disability Living Allowance from 2013 for new and existing claimants.
Mr Osborne also announced plans to help the low paid by raising personal tax allowances, taking an estimated 880,000 people out of the tax system and give millions of basic rate taxpayers a tax cut of £200 per year.
From January 2011, the Government will introduce a bank levy, which will apply to the balance sheets of UK banks and building societies and the UK operations of foreign banks. Mr Osborne said the move would raise £2bn a year once it was fully in place.
Mr Osborne said public sector workers paid more than £21,000 a year would have a two year pay freeze with those paid less getting a flat pay increase of £250 for the next two years.
The plan is the first step towards a key Liberal Democrat coalition demand of taking all those earning less than £10,000 out of tax.
'Enterprise-led recovery'
The chancellor must find £3.5bn to pay for the giveaway - which will be clawed back from top rate taxpayers - and Labour are likely to argue it is irresponsible in the current climate.
Mr Osborne also froze the Civil List payments to the Royal Family at £7.9m a year and said in future years they would be subject to scrutiny by the National Audit Office.
He stressed that the pain of his austerity measures would be shared by "everyone" - but said all would share in the proceeds of the "enterprise-led recovery" that he promised would follow.
"Yes it is tough, but it also fair," said Mr Osborne of his first budget, adding: "Everyone will share in the rewards when we succeed. When we say that we are all in this together, we mean it."
He said that the Office for Budget Responsibility (OBR) now estimated growth this year of 1.2% and 2.3% next year - compared to its previous forecasts of 1.3% of 2.6%.
Giving her response to Mr Osborne's statement, acting Labour leader Harriet Harman poured scorn on the Liberal Democrats for providing a "fig leaf" for their Conservative coaltion partners, arguing "this reckless Tory budget would not be possible without the Lib Dems".
"How could they let the Tories so exploit them?," she said, adding: "The Lib Dems leaders have sacrificed everything they ever stood for to ride in ministerial cars and to ride on the coat tails of the Tory government."
In a message last night to Liberal Democrat supporters, Deputy Prime Minister Nick Clegg made clear that his party was fully signed up to the coalition's economic strategy.
He rejected accusations that he had "sold out" to the Conservatives, insisting that the Budget would bear "the stamp of our Liberal Democrat values".[/release]
[url]http://news.bbc.co.uk/1/hi/politics/10371590.stm[/url]
A good thing I suppose, at least for the purpose of taking the country out of debt. Bad news if you're at the lower end of the income spectrum though.
Fucking hell. Things are expensive enough as it is. Nice of the bloody tories to do the opposite of what Labour did with the temporary tax cut a few years ago.
Fuck, both my parents are in the public sector and so is my summer job.
and they said VAT would be a temporary thing.
Value Added Tax. 17.5% on every purchase made, with the exception of basic necessities.
[QUOTE=windwakr;22798785]So, is VAT like sales tax or something?[/QUOTE]
Anything you buy, 20% of the price is added on and sent to the government.
[QUOTE=Thom12255;22798828]Anything you buy, 20% of the price is added on and sent to the government.[/QUOTE]
It doesn't apply to children's clothes, food or some other items I can't remember
[QUOTE=windwakr;22798843]That's crazy. We pay a 6% sales tax here in Michigan and I think that's too high.[/QUOTE]
We have stuff to pay for though. Like the NHS.
Read this if you want to know more about VAT and what stuff it doesn't apply to: [url]http://www.hmrc.gov.uk/vat/start/introduction.htm[/url]
[quote=chestymcgee;22798882]we have stuff to pay for though. Like the nhs.[/quote]
bbc
VAT up, benefits down
Conservatives, because fuck the poor right?
[QUOTE=jlj1;22798944]bbc[/QUOTE]
uh that's paid for by the license fee not by any other source :downs:
[QUOTE=jlj1;22798944]bbc[/QUOTE]
That isn't funded through VAT, it's done with the TV license
[QUOTE=RAG Frag;22798967]VAT up, benefits down
Conservatives, because fuck the poor right?[/QUOTE]
what the fuck else can they do?
seriously people need to educate themselves
we have a £900 billion deficit and the government is spending more money than it is receiving in taxation, and unless you want this country to go bankrupt, there is no other way to solve this problem
We're all going to die because of VAT fuck the governments
How dare you narcissistic bourgeoisie complain about taxes.
That wealth shall be spread to the glorious proletariat for the sake of the motherland.
These taxes are for your own good capitalist pigs.
Remember, the more taxes you pay, the quicker the state will wither away.
[QUOTE=toxicpiano;22799025]what the fuck else can they do?
seriously people need to educate themselves
we have a £400 billion deficit and the government is spending more money than it is receiving in taxation, and unless you want this country to go bankrupt, there is no other way to solve this problem[/QUOTE]
plenty of other options, labour had a plan for dealing with the deficit that wouldn't have the danger of putting the economy back into recession
but conservatives thought the poor were too exempt
Wow I'll give them a 20% increase in pounds...
a 20% increase in pounds to the FACE.
[QUOTE=toxicpiano;22799025]what the fuck else can they do?
seriously people need to educate themselves
we have a £400 billion deficit and the government is spending more money than it is receiving in taxation, and unless you want this country to go bankrupt, there is no other way to solve this problem[/QUOTE]
People criticize everything, they want the government to fix everything [B]and[/B] lower taxes at the same time. It's easy to criticize and saying that the politicians are incapable and lazy fucks when you are sitting on the couch not doing shit.
Want to fix the economy and lower taxes at the same time? Get into politics and do it, if you can actually do it then you surely won't have problems getting elected.
20%, ouch. Us Canadians bitch about the 11%-15% that we pay on sales/goods & services tax.
I mean, it's not on food and stuff but still.
Personally I think this is getting fucking ridiculous now.
As much as I dislike the cuts and rises in tax I can see that in the long run it will be worth it.
[QUOTE=windwakr;22798843]That's crazy. We pay a 6% sales tax here in Michigan and I think that's too high.[/QUOTE]
Does the United States have a federal goods and services tax like we do in Canada, or just the state taxes?
We have PST and GST.
That's intense. Where I am in the USA, taxes are only 6 percent.
[QUOTE=GreenDolphin;22799437]Personally I think this is getting fucking ridiculous now.[/QUOTE]
I agree. We already got taxed to shit to begin with. Aren't we the most taxed country in Europe? (Think I read somewhere.)
[QUOTE=Emz;22799558]I agree. We already got taxed to shit to begin with. Aren't we the most taxed country in Europe? (Think I read somewhere.)[/QUOTE]
Sweden has 20% and 25% (depending on what).
Ah right, cheers. Guess wherever I read that from was incorrect.
[QUOTE=Master117;22799552]That's intense. Where I am in the USA, taxes are only 6 percent.[/QUOTE]
You also have income tax, and property tax, and whatever your town charges you for garbage pickup and whatnot.
yeah, this VAT rate is more in line with other European countries
[url]http://en.wikipedia.org/wiki/European_Union_Value_Added_Tax[/url]
Yeah here it costs £170 a month income tax. :saddowns:
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