Stop telling me the price excl VAT
- Thread starter LiE
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Because many businesses have to charge VAT but often can't claim any or anywhere near as much back because the majority of their costs are staff wages which obviously they don't pay VAT on. So when they reach the VAT registration threshold their profit decreases.
Also the increased price of products means that it negatively affects the cash flow of businesses, and increases the cost of products for non-VAT registered businesses. An increase in corporation tax would be much less harmful to businesses than a sales tax is.
If the state does fine without a sales tax then it shows that a sales tax is unnecessary, the fact that many other states have it is irrelevant.
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![[TW]Fox](/data/man-of-honor/2009.png){kind=avatar}
No, it doesn't.
£100 billion is a lot to raise from "other more straightforward taxes".
To abolish VAT you'd be happy to pay 60% more Income Tax?
It shows that they're raising their revenue using different methods.
To go back to my previous point you could theoretically abolish VAT in the UK but we'd have to pay the equivalent of 60% more Income Tax for that to happen.
Soldato
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Sorry, I'm a little confused here. If you are VAT registed but exempt then VAT is a cost to the business. If you are VAT registered but not exempt then if VAT chargeable purchases are less than your sales (which is completely normal) then you simply pay HMRC the difference. There is no direct cost of VAT.
Again, from a cash flow perspective I can't see how a business would be hugely worse off. You indeed pay VAT to your supplier but collect and hold VAT from your customers until the quarterly return is due leading to a favourable cash position.
Yes your inventory will have a higher cost but this is offset by the above to a large degree.
I concede that a tradesman working for the public does have to charge more once they register to maintain the same margin. 77k in turnover is quite a bit for a tradesman and it's not as if the existance of VAT is a secret to growing businesses.
I'm not sure I follow. Surely they should be profitable with products before VAT is added? Otherwise they have their pricing structure wrong.
Whereas your argument is based on sound principles?
You ignore the fact the states that "do fine" have small economies, and even then the ones that have "no" sales tax actually have no state defined sales tax instead leaving up to local authorities (e.g. Oregon, Alaska and Montana).
In fact the ONLY state with no true sales tax is Delaware. Which makes your argument rubbish.
It doesnt require a 60p rise in income tax, other taxes can be raised as well, but Id be perfectly happy to pay more in other taxes to compensate, its much fairer because unlike vat income tax is means tested to a degree.
Many businesses are service based, they dont revolve around selling products, so when they have to start paying vat it cuts into their profits because they cant claim back any or they lose customers if they increase their prices to compensate.
Most service based companies are within VAT and are not exempt or outside the scope.
Unless you're referring to insurance or post offices or charities.
So you're talking about service based organisations who are not VAT registered that are competing with VAT registered service organisations. Can we have some examples?
Whichever taxes are raised it's equivalent to you having to pay the amount of 60% more Income Tax.
VAT is means tested to a degree.
In simple terms the more income/money you have the more you're likely to spend on goods and services which attract VAT.
Yep, same here.
Only been here 10 days and always forget. Making me the grumpy brit grumbling at the checkout.
The thing is in the US the taxes are different in each state so it makes sense to show the price without sales tax to allow consistent pricing. E.g. Something off the McDonalds $1 menu will be the same list price in all different states, but the total customer cost including sales tax will vary.
This is especially important online because you normally not pay sales tax when buying from a shop that is not head quartered in your state, but you do pay sales tax if the HQ is I your state of residence. E.g. If you live in Texas and buy an iPad from the apple store you won't pay taxes, if you live in California you will. That is strange, but explains why it is best to display prices without sales tax since there is so much variability.
What you can do to make your life easier is live in a state that hasn't sales tax
Not really much point wasting time on much else - once you've decided an issue is black and white thats that. I still remember the bizarre posts from you in a thread about air travel a few years back
I'm not talking about anyone competing.
I'm saying that once a service based company becomes vat registered it can eat into their profits.
[TW]Fox;23040750 said:
I guess that makes two of us then.