Hoping for a rise in VAT on items costing 500+ pounds RRP

[DistinguishedSocialCommenator]

I was positing on another thread and came up with a way we in England and Wales could raise billions in tax revenue every years that could fund a better NHS HC and educating people for better HS etc, etc and better schools.

I would propose (Someone will now actually use this idea)
Raise VAT to 30% on every item that costs more than 500 pounds RRP to 30% and use the money towards NHS and education re better health for all. (Most washing machines, driers, fridges, tv's, sofas, beds, clothing, food, and eating out cost m a lot less that 500. A bit like the new tax that was introduced many years ago on cars costing RRP 40k plus

We've boguth cars easily surpassing the 40k mark, though the extra road tax hurts, we have a choice if to buy or not or buy a cheaper brand new car or a used car. Therefore, IMO, the above is a good idea and we can be flexible with the exact figures of extra vAT kicks in at xxx - RRP and the new could be slightly higher or lower.

AIBU as this will help all of us.

Sounds like a fantastic way to encourage people to buy disposable crap instead of high quality items to last a lifetime.

Just what the environment needs.

The problem with giving the government - any government whatever colour their rosette - more money is that its just more money for them to waste. the whole idea of the NHS just needing more money and it will be fine is absolutely bonkers. It needs a politician with the balls to go for a complete root and branch review. its broken it cant be tinkered with it has to be looked at all over again with fresh eyes. give it more money and it will still be the same hopelessly inefficient thing that it is now.

Nah that's a silly idea. Everything will just cost £499

I doubt the politicians and media are reading Mumsnet to pick up on your ideas either

A withholding tax on money leaving the jurisdiction might be a better idea. But that will never get off the ground as it would be viewed as boring and difficult.

This is one of the worst ideas I've seen trotted out on Mumsnet and I've seen some corkers.

As others have said, you will just get cheap shitty version of appliances in the under 500 bracket which is awful for the environment and the more expensive 'luxery' products will be even further out of reach for normal people. A 30 percent increases on the lowest price eg 500 would be 150 pounds, which is going to be a real slap on the face when unexpectedly your washing machine packs up. People are struggling as it is.
Also I imagine medical machinery costing hundreds of thousands would have this tax applied too, the NHS isn't tax proof it pays just like anybody else. So you have just made already incredibly expensive precision equipment even more expensive.

Ridiculous and ill informed again.

More money could still help the NHS if they actually paid doctors, nurses, and other staff a competitive amount to stop them leaving. It would make their workload more realistic too, which would again stop some leaving, and convince others that training was a sensible career idea. More staff would have a big impact on quality of care and waiting lists. Or they could provide more money to eg. help pay energy bills in hospitals or some of the other massive increases this year that end up taking away the funding that would help patients if used in other ways.

So anything that provides more money for the NHS is a good thing in my view, if it's used appropriately - yes also lots of reform needed in how it's managed.

Whether this would be the best way to do it or not, I'm not sure, but I don't see why ideas like this shouldn't be considered, even if it's not this exactly amount or on that price level. I'd think a smaller % might be better, and on more luxurious things than £500; it might not even be this sort of tax - but I wouldn't write ideas like this off wholesale - nothing wrong with considering alternative ideas, whether it's actually put into practice or not.

What a dreadful idea.

Encourage the purchase of cheap and poor quality products which will break and be in landfill within a year. Force out all the quality makers and small artisan businesses in favour of cheap Chinese imports.

And we all know the level will not be regularly reviewed.

Sorry OP but I'm not voting for you!

VAT is an arse of a tax to legislate for.

Just do a little dig into the caselaw precedent for ‘single or multiple supply’, and you’ll see what I mean. Those +£500 items would be stripped below the threshold into various component parts, before you could say biscuit tin.

Of course they aren't. Did I say they were? I'm not deluded like the OP.

Tell me you have never worked in business without telling me you’ve never worked in business

This is SUCH a dumb and unworkable idea

Plus the arrogance of believing some random thought that’s come to you is a) original b) workable c) actually a good idea

£3k for a telly! 😲

reading people's points about the quality of things declining to get them under the price point etc makes me agree that this probably isn't a useful idea, but nonetheless I am not against the idea that something to create more money that could be directed towards the NHS could help, even if people think it's well funded already. If it were, we wouldn't have doctors and nurses leaving in droves or avoiding going in, we wouldn't have falling apart buildings and equipment, etc.

My proposal does not impact those on low wages or mid wages, unemployed or even the rich for that matter, as you have a choice

One of the stupidest things I’ve ever read. People on low or mid wages don’t need cars, furniture, carpets, appliances, electronics. I guess if you are poor, you don’t “need” a tv or a washing machine. Poor kids can do all their online homework at the library, if only it wasn’t closed by the time they get home from school because that will be amazing for social equality. You can wash your clothes in the sink and drip dry them. People would be selling sofa frames, plus cushions, plus covers as 3 separate items to get around it. Builders merchants will be splitting £4900 bills into 10 individual ones .People won’t be able to afford the hike, will stop buying and businesses will close. I sell VAT rateable good (food, not luxury) and VAT at 20% is already causing huge closures across my sector. It’s my 3rd biggest bill and 4x my own salary (which is admittedly under min wage as the heavy taxation means I can’t pay myself properly atm). You’ve dropped £80k on cars and you have the cheek to tell me that not having a washing machine won’t impact my life?

If we're not careful, paying higher wages to nurses and doctors could make things worse. As we saw with Blair's GP contract and then more latterly with the stupidly high tax/pension charges on the likes of GP pension schemes. They just work fewer hours which means the shortage gets worse!

I'd love to see any significant wage rises to doctors and nurses be linked somehow with a requirement for them to work the same, if not more hours, to qualify for it. I.e. a bonus for those working 4 or 5 days per week, or a sliding hourly rate scale which increases the "per hour" rate for the more hours that they work. It's the only way to stop workers from reducing their hours/days when given a significant pay rise.

The last thing we want is a full time doctor being given a 20% pay rise and then deciding to cut their days to just 4 instead of 5 because they can afford to!

Hello

Sensible point. As I said, it needs to be looked at a little more closely, but the idea is really good.

One main concern is all of them, tories/labour will waste the money if not properly ring-fenced
Thank you.

Small businesses will be damaged, many never recovered from the mess of lockdowns.

The majority of the public bodies, including the NHS, will never improve no matter how much money is given to them. There needs to be fundemental change.

The way to increase tax take is to increase the tax free amount for earnings, then have a flat rate low tax. A higher tax free amount for employment will encourage work and reduce the benefits paid, therefore more money for NHS etc. A flat rate tax minimises any kind of tax avoidance, people are more willing to pay their tax as they feel it is not too high, this equals a higher tax take.

Finally, lower corporation tax to encourage businesses here, more employment, more corporation tax paid, once again equals more money in the coffers.

No thanks.
That would just add a lot of essentials & things that make life more bearable to the unaffordable list.

Exactly that and this is why I'm against the big increases the docs are seeking

Local gov workers went without a rise for three years - we all have to adjust

For retired people often income reduces and the savings they hold become gradually worthless with high inflation - so keep wages/costs down is good

Yep, we'll be having laptops sold for £499 but without a battery, so you have to buy a battery separately for £250, all for the same laptop that currently costs £749!

The VAT registration threshold currently screws very small businesses who sometimes "split" their businesses so that they don't have to register for VAT. There are pubs with two separate "businesses" - one owned by hubby selling the drinks and the other owned by wifey doing the food. I know of a fireplace shop who has two businesses - one to sell them and the other to fit them. Look at Carpetright - they sell the carpets, but you have to pay the fitter separately.

Adding a random £500 threshold into the mix will just make that kind of thing more common.

But if they have options to leave the NHS or leave the UK, they won't adjust. Whether anyone thinks that doctors get paid enough or too much or whatever, doesn't really matter - if they are leaving, then we have to do something to fix that. Again, alternative ideas like linking pay rises to hours could be considered - I don't know enough about that yet to have an opinion - but not giving them pay rises because others don't have them isn't going to work either. More doctors, more nurses, more staff, all would make working conditions better, increase people wanting to go into medicine, etc., and that has to be helpful in the end.

At the end of the day, if we want more tax revenue to be generated, we need to grow our economy and that means supporting business a hell of a lot more than we currently do.

Actually NOT excluding over 3 million freelancers/self employed would have been a good start as we'd have more businesses who would have survived covid, most making profits, employing people, paying taxes, etc., and fewer people on the dole and empty business premises!

It would be good to have a government who supported smaller and private businesses. Tories just want their "big" business friends. Labour don't seem to like business at all. The vast majority of people in the country are employed by small and medium sized companies, yet they're barely ever given meaningful support, neither at start up stage nor ongoing. Yet some foreign multinational wants to set up a factory here and the govt bungs them a few billion!

@Leafbuds

increase people wanting to go into medicine, etc., and that has to be helpful in the end.

There's no shortage of people wanting to go into healthcare. Medical schools are grossly over-subscribed by applicants with the required exam grades etc. The problem is retention, both of trainee/newly qualified staff and those later in their careers who either give up or reduce their working days/hours because they don't need to earn more.

We need more medical schools as a starting point. We've needed more for decades, but between successive governments and the BMA, the number of training places just hasn't increased enough. Govts didn't want to spend money, the BMA didn't want too may new doctors as it would reduce their bargaining power and career prospects.

I struggle to see how your proposal wouldn't impact people with low and medium income. I work for the NHS and the pay is no way high. I had to invest into a new mattress this year. It was over £500 which was a big investment for me. I am not sure I could stretch my salary any further than this by adding 10% to the cost. Neither I could pay additional 10% to pay for my 3,5k car. So I wouldn't be able to travel to work in under two hours and my partner would continue to struggle to sleep due to chronic pain and unsupportive mattress. I also wouldn't be able to earn extra money through my other job which requires reasonable spec computer.
£500 items are not luxury items. And yes, this will very much affect low and medium earners.