I've arranged to buy a car. Signed contract, arranged finance, sent the forms back.
Now suppose I don't actually get the car until 2 December, ie after VAT goes down. On a £12,000 car, 2.5% is £300, so a not inconsiderable sum.
Should the price of my car go down?
I should say that I don't really mind if it goes into the Exchequer. What I don't want is for the dealer to pocket the difference.
Anybody know?
Edited by GroovyMucker on 24/11/2008 at 17:18
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I wouldnt expect it to. Vat liability arises when the invoice is issued.
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This should also help in bringing second hand car prices down even further as new ones will be 2.5% cheaper. If I had a bit of money saved now would be the best time ever to order a brand new car probably.
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There will be so many people taking stuff back for a refund only to buy another in the fortnight or so around the change (if there is one).
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>>VAT cut - who benefits?<<
only the goverment ! - vat cut to be financed by rise in fuel duty. Alcohol, and Tobacco, as uusal. what you save in buying the car, you lose more in running it.
Billy
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after VAT goes down. On a £12,000 car, 2.5% is £300, so a not inconsiderable sum.
Console yourself that the difference is a bit less than you suppose, it's 2.5% of 117.5%
or about £255
Unless I've got it horribly wrong..
Edited by Another John H on 24/11/2008 at 17:41
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"Console yourself that the difference is a bit less than you suppose, it's 2.5% of 117.5%"
I think that might confuse people but the £255 is right.
VAT was 17.5% and will be 15%. So to work out the cost + VAT is was 1.175 (or 117.5%) and will now be 1.15 (or 115%).
To work out the difference is obviously the opposite and simple maths. Take the with VAT price @ 17.5% and divide by 1.175. Then take that price without VAT and multiply by 1.15 to work out the new price.
So for £12000 it would become £11744.68 so a difference of £255.32.
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Either this VAT cut hasn't been thought through, or I haven't heard what other measures he's made about the V.A.T. scheme.
I'm self employed, so charge 17.5% on my services, I then repay on flat rate 10%,so I now have to collect tax for the Govt, and earn 2.5% LESS for the pleasure of doing it -I hope I'm wrong and it will be reduced to 8%. Otherwise it will be more worthwhile to revert to claiming all the Vat, as I used too -creating more work for me, my accountant and the Vat man -with less money all around -classic Labour create jobs out of nothing,which have to be paid for
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wotspur - you will have to wait for full details on your particualr issue.
Hauliers aren't happy. They claim back VAT on fuel, this has been reduced, but fuel tax has increased to compensate for this decrease in VAT and of course they can't claim fuel tax back! Increased costs for haulage companies.
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VAT can be reclaimed on fuel for any business use - or indeed private use if the fuel scale charges are paid.
This means that most businesses have actually seen their fuel costs increase slightly.
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For most people a small reduction in VAT will make little, if any, difference to their spending habits - unlike politicians they live in the real world.
The fact that the motorist, smoker and drinker will be clobbered yet again as a result merely adds to my contempt of most of said politicians.
In the case of car dealerships and, indeed many other businesses, I'm pretty sure that any VAT reduction will be quietly added to their own financial returns rather than customers, as it would presumably be so easy to hide in PX valuations etc.
I've noticed in the past when buying a used car with a PX that the invoice figures have often varied from those agreed verbally during the actual transaction.
As it was no skin off my nose, I didn't worry too much at the time.
Edited by Stuartli on 24/11/2008 at 20:51
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They claim back VAT on fuel this has been reduced but fuel tax has increased to compensate for this decrease in VAT and of course they can't claim fuel tax back!
Has it been clarified as to whether this fuel duty rise affects diesel? I immediately thought of the hauliers when it was announced and checked the published text of his speech; he specifically said "alcohol, tobacco and petrol."
So income tax [NI] is up a full 1%; fuel duty up by around 3% - and everyone is talking about a stimulus to jobs and business...?
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It's even worse than you think!
The 'delayed' 2p/litre fuel escalator is also being imposed on Monday.
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"Console yourself that the difference is a bit less than you suppose, it's 2.5% of 117.5%"
The VAT cut is a bit more complicated still, isn't it? The on the road price of a new car will include first registration fee and VED. So I'd have thought you have to take these away from the price you pay to arrive at the cost of the car including VAT and then work out the effect of the reduction. Not wishing to nit-pick but it's a nit-picking reduction.
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Extract from the complete report :
7.39 As a result of falling oil prices, pump prices have now fallen by more than 20 pence
per litre from their July peaks. The Pre-Budget Report therefore announces that the 2 pence per litre increase in fuel duty planned for 2008 will now take place on 1 December 2008.
However, as a result of the 2.5 per cent cut in VAT this December, the cost of petrol and diesel will fall for private motorists who should see no increase in the price they pay at the pump this year from this measure.
7.40 The Pre-Budget Report also confirms that, as pre-announced in Budget 2008, main
fuel duties will further increase by:
. 1.84 pence per litre on 1 April 2009; and
. 0.5 pence per litre above indexation on 1 April 2010.
Edited by MikeTorque on 24/11/2008 at 23:03
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>>>fuel duties will further increase by:
. 1.84 pence per litre on 1 April 2009; and
. 0.5 pence per litre above indexation on 1 April 2010.
Not to mention the VAT going up to at least 17.5% by Jan 2010
Ker-ching!
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Back to the original question ...
heard from the dealer today. He suggests I wait until next week, and I'll get the VAT off.
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Some ford dealers are saying buy today and pay the new rate of Vat.
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Some Ford dealers are saying buy today and pay the new rate of VAT.
Only if payment and legal transfer takes place on or after the official start date.
Edited by L'escargot on 27/11/2008 at 07:48
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For those (like me) who aren't familiar with the term "cui bono?" ............ tinyurl.com/6kplzy
Edited by L'escargot on 27/11/2008 at 07:30
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As the link explains, it doesn't just mean who benefits ?, or what's the point?
It suggests there is a hidden motive, and all may not be as it seems. The clue to discerning the motive may well be not unrelated to who ultimately benefits.
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I see local councils are not reducing their car park charges;just pocketing an extra 2-1/2 %.
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Then a letter to the £145,000 chief executive of my council will be on it's way !
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I see local councils are not reducing their car park charges;just pocketing an extra 2-1/2 %.
When I park for 2 hours for £1.20 the council will gain 2.5p. Big deal! Anyway, the machine can't handle such small increments/decrements.
Edited by L'escargot on 27/11/2008 at 09:59
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When I park for 2 hours for £1.20 the council will gain 2.5p. Big deal!
I suppose that is consistent with your other post, in that every little bit of VAT not passed to the taxpayer helps the Council pay inflated salaries to the execs:
"Credit Crunch Takes its toll: Volume 7 - L'escargot Thu 27 Nov 08 08:00 Do you think this reduction in VAT will have any beneficial effect?
Every little helps. "
Asda are holding a "zero vat" sale this weekend on electrical goods.
Edited by jbif on 27/11/2008 at 10:06
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Or it pays the increase in fuel duty and NI which were both raised to pay for the 2.5% VAT reduction!
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2.5 p gained from say 1,000 parkers a day....nice little extra in the coffers.
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I understand car park machines (and other similar stuff) cannot handle a difference of vat rate of 2.5%.
But if Vat had gone up rather than down, would the prices still stay the same?
The same comment to all those who think a cut of vat is of no vlaue. if it had gone up by the same amount would the comments be the same?
I know what my thoughts on it are !
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Our local car park charges 30p for and hour. VAT at 15p would make this 29.36p so rounded down to 29p. And it does not give change.
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Completely pointless tax cut as 2.5% (or rather 2 and a little bit %) price cut is just lost in the roundings.
Equally a 2.5% price rise would be lost in the roundings. Petrol and beer don't tend to go up in price exactly the moment the chancellor sits down from speaking; it tends to take some weeks for increases to feed through.
Imagine the cost to retailers of implementing this cut in VAT. This is just so much tinkering around the edges to seek headlines, causing extraordinary amounts of work for businesses.
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The vat cut was purely the "cloak" he used to try and cover the fuel duty. Alcohol, Tobacco
and NI rise. He was hoping to dupe the media and public into going around shouting "Wow! New Labour! they are the first government to cut VAT for Thirty years!"
Unluckily for him, he used the cloak from the Emporers new clothes, and we all saw through it!
Apart from (as mentioned) all the extra work and expenses this has cost retailers and small businesses, it will cost 12.5billion on top. If anybody else had made an error at work that cost 12.5b they would be claiming jobseekers, but hey! he's the Chancellor to an unelected PM, we'll keep the "Traditional" British "Stiff upper lip" and let them blunder on an on an...........
Billy
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he's the Chancellor to an unelected PM
Like all his predecessors, then; Prime Ministers in the UK are appointed rather than elected.
In some countries the PM is directly elected, and in other countries they are elected by the Parliament ... but rather than even that system of indirect election, the PM of the UK is chosen by the monarch, who invites someone to try to form a govt.
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strictly speaking you are correct! - to a point, but is the head of a political party not elected by the party members?. Then upon that party being elected into power by the public at an election, does the "P.M elect" not appear before H.M at B/Palace to be "accepted" as her Prime minister, and then be invited to form a government as her representative in the "commons"?
Billy
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....Our local car park charges...
Technical point - VAT is charged on off-street parking.
VAT is not charged on on-street parking.
So for all of us who do expenses, it's a VAT receipt for the multi-storey, but a non-VAT receipt for the parking meter.
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It's an open air car park and not on street. But it's pay and display so there's a "meter" to pay and get your ticket.
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Known as a surface car park - VAT is chargeable.
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"Known as a surface car park - VAT is chargeable"
I know VAT is chargeable - I use it you don't.
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