Nobody could help but notice the serious nature of the news with regards our economy at present. But, at the end of the day, how many of us fully appreciate our position as a consequence of all of this? This is where 1st Contact aims to set the record straight. We believe that small and local businesses have every chance to keep their heads above water and survive this current economic downturn. This is one of the fundamental reasons for us investigating the information which is contained in this article.
In the latest reports in November 2008, Mr. David Cameron reported that leaked documents showed that Gordon Brown was about to raise the VAT to an unprecedented rate of 18.5% or higher to put a further burden on the shoulders of the business owner and family bread earners. A row broke out in parliament and Mr. Cameron used hard language in the style of giving the UK the “debt levels of Italy” and more of the same.
The Prime Minister admitted that his ministers had discussed raising the VAT but had in fact decided to lower the rate funded by borrowing. The PM essentially called Mr. Cameron’s bluff. However, he retaliated by asking why was there a document saying such with the PM’s signature on it? The two bickered back and forth, mentioning something about a Black Hole, glitches in the system and the VAT was to have been raised by 1%.
Looking back at later recessions when the VAT was only 8%, raising it to 15% was a sordid hardship on most families. Again in the 1990’s when the VAT rose to 17% it caused a further rift in the load most households were carrying. Then there was a further rise in the VAT on gas and electricity which added fuel to the fire. Mr. Cameron stated that the PM was about to bring the country to the brink of disaster.
It was later brought to light that Chancellor of the Exchequer, Alistair Darling, admitted that the PM’s signature should not have been on that document at all. He had held a press conference and the ministers had decided to lower the rate rather than raise it. It was all for nothing, it seems, this argument. 1st Contact will be able to discuss any tax related matters and they can provide assistance and support through these hard times.
What exactly is VAT?
VAT stands for Value Added Tax and it is usually added into the price of goods and services. On a product sold in a store or on supplies sold to a business, there is an extra tax added in or valued into the price of the item, called VAT, which helps to pay for various costs around the UK. If your business has a turnover of £67,000 or more it is wise to register for a VAT number and pay the VAT you receive to the HMRC on a quarterly basis.
If you are a traveller from another country and stay for a couple of weeks in the UK, you might be able to claim the VAT you had to pay for a purchase you made. The VAT office (HMRC) has very strict rules about who may qualify for a VAT registration number, how the business is run and how you pay VAT. Households may claim VAT that they paid if you can show the receipts for your income tax.
If you have any enquiries relating to the content of this article, do remember that 1st Contact are on hand to provide you with assistance and advice. We firmly believe that even the smaller companies can ride this recession out and we will be happy to discuss your options to strengthen your chances of doing just this.
1st Contact Tax offers specialist tax services to contracting professionals.
These services include: Contractor Accounting, Contractor Umbrella payroll, Personal Tax for Contractors, Limited Companies for Contractors and Contractor Financial Advice.