Election result: Status quo for VAT
Neil Warren doesn’t expect to see any major VAT changes in the next few years, despite the Conservative government’s majority following the general election.
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Surprising headline - would have thought their turnover would have dropped below the threshold by now !!!
Today's Times states that a new clause in the Brexit Withdrawal bill coming to the Commons this Friday will let courts below the Supreme Court overturn ECJ rulings. So British courts will be able to rule on existing EU case law on VAT, among other things.
That being the case (and we will see on Friday), expect to see a lot of changes in VAT after Brexit.
It will bring an increase in case law as taxpayers and maybe even HMRC seek to overturn existing EU judgments.
IF and it's a big if, Britain actually withdraws from EU membership, then there is absolutely no justification in maintaining VAT.
Value Added Tax was another lie from Heath:
"One simple tax; one low rate!" He quoth.
Simple? I wish! Low rate? I wish also. VAT replaced Purchase Tax; which of course ONLY applied to the sale of new high value luxuries; never ever on secondhand goods; and never ever on work!
When artisans provide new goods as part of their work (Plumbers, kitchen fitters etc), then they are soon over the mandatory registration turnover limit: which simply means a majority of their customers must suffer 20% extra on the labour cost.
This iniquitous tax is a tax on work! The self employed already suffer Class IV NIC - for which they receive no benefit.
It must also be stated, a percentage of ALL VAT collected in the UK goes direct to EU coffers. Ergo the minimum Government ought to do is reduced VAT by the value of this levy.
Eh?
VAT wont go down, the government is going to be desperately short of tax post brexit. The EU does not "take a %", EU funding is based on a complex formula based on the overall size of the UK economy vs the rest of the EU, and has most of that comes back to the UK anyhow there is no "money on the bus" That was a fat lie by leave.
Replacing VAT with a sales tax does not solve the problems with VAT, it just mirrors them into a new system with all the attended transitional issues on the way.
Clue:
In the election debates the Government made lots of promises on not putting up income tax, NI, inhertiance tax.
Not VAT though. You heard it here first.