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.

And that’s only Europe - doesn’t even consider the behemoth that is American healthcare costs

Fucking hell its bad enough im being stung paying more than double for a car and car insurance because mine is coming to the end you now want to make it even more expensive? If prices hadn't rocketed I would be able to buy a better car to begin with as it is im stuck paying thousands for a car im hoping is better than the one I've got and then I've got to try and insure it

No I can't ride a pissing bike

£500 is such an arbitrary number. A £500 handbag is a luxury product, a £500 car not so. Also the <£500 washing machine is likely to be less water and energy efficient than the >£500 machine as well as wear out sooner. Nonsense idea.

Any increase in non-progressive taxes is fucking nuts.

The OP's basic premise is that anything that costs more than £500 is a luxury and unnecessary. 😂

All I can say is OP must lead a very limited life, have no comprehension of investing in infrastructure and live in a new centrally located home bought for her by someone else.

Meanwhile... in the real world...
a season ticket
a new boiler
a new bumper/light array for my 12yo car
a new double glazed window
a new shower pump
a new (mid quality) sofa

...all cost more than £500. None are luxuries.

Thank God the OP will never get anywhere near even suggesting policy or blighting the lives of those of us just trying to maintain the basics in difficult times.

VAT is more popular than sales tax across the world due to the timing of payment. As a (very) simplified example:- Raw material supplier sells to manufacturer at £100 + £20 VAT in January - government gets £20. Manufacturer sells to wholesaler at £200 + £40 VAT in March - government gets another £20. Wholesaler sells to store at £250 + £50 VAT in April - government gets another £10. Store sells to consumer at £400 + £80 VAT in May - government gets another £30.
Governments much prefer receiving £20(jan)+£20(mar)+£10(apr)+£30(may) than getting £80 in May.

I see no fundamental problem taxing different classes of goods at different rates - we do this already, but doing it by sales price has many flaws.

Another problem with OP's proposal is when quantity becomes a factor.
A bottle of Dom Perignon Vintage costs £200 and VAT is 20%. If I bought a case of 6 for £1200 - should this attract VAT at 30%?
Christian Louboutin Loubishark trainers are £800 so VAT would be 30% - but I could buy a left trainer for £400 then a right trainer for £400 and only pay 20% VAT.

We don't want Labour back in as trust me if you've got a bit of savings, own your own home and a private pension, you will be seriously hammered.

Oh dear. Anyone with a mortgage in the last couple of years care to comment?

How to create another excuse for rip-off Britain. Companies will pass it on because of some excuse.

Target indirect tax rises if you have any on specific items. Booze sold in supermarkets, SUVs, for example.

Where did people get this weird idea that they should get anything in return for their taxes ? Honestly, no wonder the country is in the state it's in.

I disagree.

Would disproportionately effect low income people buying big ticket essential items like washing machines or beds.

This is one of the most nasty and horrific comments that someone has ever aimed at me on the net.

Have you checked the price of new washing machines??? Hundreds sub 500 pounds washing machines for Peters's sake.

Thank you

As I said it has to be finalised and my public consultation is assisting with this.

Re example of a bottle of the real stuff Vs a box, valid points are easily addressed, IE, as a bottle of the hot stuff can be a complete stand-alone item, then it does not attract the 30%

I believe you will agree with me.

£500 is quite a low amount. I’m very much of the opinion ‘but cheap, buy twice’ so usually get expensive appliances which are built to last. My spare fridge freezer was £900 and is still going strong after 16 years.

Bad idea. Nightmare to implement. VAT legislation is complicated enough as it is. And I say that as someone who has this week paid our firm's eyewatering VAT return for the last quarter.

It's a 'No' from me.

Surely not?

I spent 650 on a mattress because I needed it due to spinal problems.

I spent 635 on a sofa because it needed to be supportive and the correct height.

If I ever get the money together, it's going to cost that to have something other than bare hardboard upstairs. It'll cost more than that to replace the lino in the wetroom that's torn because it was laid direct onto bare concrete. It'll cost more than that to replace the kitchen units that have rotted through due to an absence of insulation or underlay on the floor underneath more torn lino.

It'll cost about that to replace my laptop that I use for work/makes me employable, as the cheap ones don't have the processing power to cope with the work I do. It'll cost that to set up an ergonomic desk area when I can't physically make it into work everyday.

850 for air filtration due to the pollution in the area.

Maybe if you were nearer to the two grand mark, you might have a point,

My future hearing aids will cost more. So would my glasses or contacts, all thanks to my body being a bit shit.

I'm fine about your car costing an extra 20%, but leave the rest of us poor bastards alone.

A far better way to raise more VAT without changing the system too much is to reduce the level which you need to register

Totally. The £85k threshold was brought in when Moses was a boy to help small businesses with small turnovers stay competitive. It’s a ridiculous amount now. It should either be brought right down to something like £2600 so someone selling a few crafty bits on Etsy doesn’t get embroiled in paperwork, or zero, because it’s a sales tax and everyone selling should collect it, or brought up to something like £500k to encourage small businesses to increase productivity. Lots of businesses in my sector just work fewer and fewer hours to stay under the threshold, rather than being more productive and turning over eg £200k (which would bring in £40k in VAT instead of zero). Don’t even get me started on the “cash only” and “the card machine is broken” crowd.

And staggering the payments, 8% on first £10k, 12% up to £80k, 15% up to £250k, 18% up to £500k, 20% up to £1.5mil, 22% over that would massively help independents. You would still get stalling around the thresholds but not so much was we do now.

Re example of a bottle of the real stuff Vs a box, valid points are easily addressed, IE, as a bottle of the hot stuff can be a complete stand-alone item, then it does not attract the 30%

So a £200 bottle of wine, or a case costing £1200 is 20% VAT but some poor bastard replacing a mattress is 30%? But it doesn’t impact low and mid pay workers?

This is about as sensible as your idea that doctors shouldn’t be allowed to strike @DistinguishedSocialCommenator.

What a totally awful idea and really poorly thought out.

Rubbish, Loads of good mattresses around sub 500, read the reviews

This looks to be even more impractical than OP's proposal.
Businesses that are not VAT-registered are not allowed to charge VAT and also can not reclaim VAT on goods bought.
So a £200 (exc VAT) item would be £216, £224, £230, £236, £240 or £244 solely depending on the size of the business selling it?
Also, how would a trader decide on which band to apply? Would it be based on previous year's sales?
If they are in the 15% band and buy an item for £120 + £24 VAT(at 20%) and sell it for £160 + £24 VAT(at 15%) do they pass nothing on to the government?