Pre-Budget Report

[Arianna]

Just listening and they are reducing VAT from 17.5% to 15% as of December 1st 2008 until the end of next year (it will be in place for 13 months). They are asking that this is passed onto retailers. That means that anyone who is VAT registered that makes sales from December 1st on wards needs to charge 15% instead of 17.5%. Of course this also means anyone who makes purchases for their business will benefit from the decrease in VAT.

The increase in corporation tax for small businesses that was to take place, is now being postponed.

National Insurance contributions have also gone up by 0.5%.

There may be other changes, but I will have to wait until I get to read the full report.

Arianna

[DaisychainBaby]

Thanks for the update Arianna - good to see there's a set timeframe in place so we're all prepared!!

[Bunny]

urgh, the VAT change will cause chaos at work, so glad I'm off work this week, ben the phones havent stopped ringing all day from clients asking about the changes

[Bunny]

and I don't like the way they are saying we'll be better off, whatever we end up saving on VAT will go towards paying the extra NIC we have to pay

[DaisychainBaby]

Ain't that the truth - they can dress it up however they want, there will be always be repercussions.

[Arianna]

I need to do an email now to all my vat registered bookkeeping clients - and let them know. Going to wait till it's released on the net though so I can provide them with proper links. I'm expecting a very busy inbox.

Arianna

[funkydorydawn]

Thanks for the update Arianna.

I'm glad that I'll be paying less on my suppliers' bills but don't envy those who are VAT registered or those who work in your industry!

dawn
xx

[Arianna]

Thanks for the update Arianna.

I'm glad that I'll be paying less on my suppliers' bills but don't envy those who are VAT registered or those who work in your industry!

dawn
xx

I'm dreading my inbox - maybe I should go on holiday early. LOL

At least there is a definite date it will happen so that will help with regards to bookkeeping wise.

Now I wish I'd waited to buy some bits for Delicate Dreams. LOL

Arianna

[littlesheep]

Now I wish I'd waited to buy some bits for Delicate Dreams. LOL

Arianna

Snap!

Oh well - think I might hold off that new supplier until next week!

We mustn't forget to all place our big orders before it changes back again too!

[lajlaj]

Yes but in reality 2.5% is a tiny saving on most things. It is going to cost more in admin than anyone will actually save and a couple of quid savings (maximum) here and there is hardly going to give people more money to spend. The only time it will make a huge difference is if you are buying something worth hundreds or thousands of pounds!

[Bunny]

so Mr Darling thinks he being nice to is he by reducing VAT ???? I don't think so !!!

But it was not all good news for consumers. Mr Darling said he was going to "offset the VAT reduction" by increasing duties on petrol, alcohol and tobacco "by an amount which should keep the overall cost to consumers the same this year".

[Miranda]

I'm sure I heard he's upping import duty or duty of some sort. Got to wade through and find that bit. Anyone know??

[Emsickle]

Yes but in reality 2.5% is a tiny saving on most things. It is going to cost more in admin than anyone will actually save and a couple of quid savings (maximum) here and there is hardly going to give people more money to spend. The only time it will make a huge difference is if you are buying something worth hundreds or thousands of pounds!

Totally agree. Lets face it - 2.5% on something costing £15 isn't a huge deal, but to something costing £15k then it will have an effect. But for me though, it will reduce our VAT bill each quarter which is so far in the region of £5k so that is pleasing for me (except all of the paperwork changes that are going to be made - aren't I glad my invoice just says VAT at the current rate, instead of actual percentages).

I do have to say though, at least they have been honest and said that taxes will need to rise again in the future - that was something which was pretty obvious tbh to anyone and at least they have confirmed that that is the case.

Glad about the news on the Business Taxes aswell, although will be interesting to see if the bank actually does pass this on to us.