1. Deflationary for the next 12 months
Inflation Gaurenteed to be at leats 1.1%
2. Reduces business liquidity possibly by over £1bn
Yup, the same affect not sure about the value
3. Little or no help to SME’s in the B2B sector
No change there
4. Helps lower income individuals/families proportionately less than higher ones
Hits lower income groups more.
5. Gives businesses / retailers abilities to mark up price changes eg 70p chocolate bar is now 68.52p
Forces retailers to absorb the cost increasing, lowering there margins and reducing scope for growth
6. Reduces the price of cigarettes probably first time in 20+ years
Cigs go up again (no harm IMO)
7. Reduces alcohol prices – possibly encouragement to binge drinking
8. Involves re-priceing by virtually all retailers at their busiest time of the year (supermarkets & garages can cope easily – others less so eg restaurants)
More costs, less expansion
9. Reduces restaurant/ hairdressers etc tip income Lower paid impact again
Reduces liklihood of tips due to higher costs
10. Requires HMC&E to recalculate Flat rate VAT scheme rates & notify SME’s – initial confusion
Yup, exepet it will be Revenue doing all this…
11. Reversal to recover lost income requires possibly an increase of 33.3% in VAT rate
okay so this one wont effect
12. Reversal of rate increase will slow recovery
It could slow any possible recopvery due to increased costs
13. Optional increase in Income Tax personal allowance could have given 75% benefit immediately ie December/ January wheras VAT benefit spread over 12 months
14. Doesn’t reduce food prices – idea why not negative VAT rate!
Increase food prices
15. Doesn’t significantly help housing market – critical
Definately dosent help housing market.
So two of the fifteen wont happen with the planned increase, but the increase will hurt in the long term.