VAT hike coming?
Just been watching the Chancellor on the telly and he said everybody is going to pay more tax (ie everybody). The Institute of Fiscal Studies suggests this means a VAT hike, which will increase the selling costs of everybody here and make raw goods more expensive to buy. I’m glad we aren’t VAT registered but the additional VAT on goods we buy will make things even more competitive on here than they already are. Sounds to me like the rocky road we are all on already is about to get very much rougher 
0 replies
Seller_77IcbQKVGdZo0
A VAT hike would also in some ways be counter productive as it would make the cost of high valued goods a lot more expensive which would decrease demand and push growth down and the country further into recession.
In previous recessions VAT has been temporarily cut to increase spending.
I have heard the words tough choices a number of times so I don’t think anything is off the table but a VAT rise would be difficult to cope with as I suspect a lot of sellers won’t adjust their prices and I will either have to be uncompetitive or have lower margins.
There are also other things to impact limited companies such as corporation tax increase and possibly the tax free amount on dividends decreasing which could be announced this week.
It is going to be a tough time ahead and I think there will be some online sellers chucking the towel in at some point.
Seller_amUAzjvL5uIzu
Absolutely no chance of a rise in VAT rate just another freeze on the VAT threshold.
Seller_Gq0aGvAqLaCsZ
It is going to hit our margins, getting to the point where I am actually wondering if it still pays to be a Ltd company over a sole trader anymore.
By the time I have paid my accountant and the bookkeepers massive fee hike to do the paperwork, I am actually wondering if it’s worth it anymore.
When it comes out on Thursday, a decent online calculator would be useful to compare costs
Seller_o0lOqCFEvqBrE
@Retro_Emporium Why not get VAT registered so you can claim it all back then? You may not be over the £100K threshold to have to register but it would potentially be worth it. It would mean you could claim VAT back on up to 5 years worth of items you’ve purchased that you use for the business, as well. Your desk, PC, laptop, chair, pens, paper; that can all be claimed back.
Seller_77IcbQKVGdZo0
I have been doing some reading about this today it looks more and more likely VAT will not rise and it will just be the VAT threshold that will remain the same and not increase in the near future.
This combined with rising prices means that a lot of traders who are not currently VAT registered will be forced into being VAT registered. A knock on effect for small sellers on here, however for most it will not have an impact.
Seller_IotgWgSZV4UrT
I wonder if he’ll look at the zero rating for books.
Seller_IcGtGTuwjEcXw
The Chancellor is preparing to hold the threshold at which businesses must register to pay VAT at £85,000 of turnover until 2026, instead of raising it in line with inflation.
The plans mean that thousands more businesses will pay the tax for the first time as their turnover increases in line with rising prices.
VAT increases would directly hurt the poorer 1st too.
The big three personal taxes are income tax, National Insurance and VAT. One of these will have to give, if the Treasury is to make its sums add up.
Increasing VAT from today’s 20 percent would only worsen the cost of living crisis by driving prices even higher.
That would scupper Bank of England efforts to squash inflation by hiking interest rates.
Seller_n33KwLeg9XOvi
If there is a VAT rate increase - how soon do you think it will come into effect. I reckon at least 12 months notice period.
Seller_igyftvDlTM0r2
Corporation tax is to increase next year on companies earning over £250k. From 20% to 25%
No indication of VAT increase. Unless I’ve missed something?
