I1L2T3 Posted June 2, 2012 Share Posted June 2, 2012 I1L2T3 seems to be placing a lot of emphasis on the KPMG report. Who paid for this report I wonder? About 15 years ago I worked for an insulation company, and did some work in conjunction with the The Association for the Conservation of Energy in preparing arguments for reducing VAT on energy saving materials. ACE claims to exists to reduce overall energy demand to ensure a secure and sustainable energy future, in reality it exists purely to defend and promote the interests of it's members. It's members are commercial organisations that sell stuff, they don't share the lofty claims of the lobby group that they pay to represent them. The reason I mention it is that I was involved in a political lobbying process that made unaudited, unsubstantiated, exaggerated claims about the impact of a VAT reduction and energy efficiency that I knew was no more than lies. Since then I am always sceptical of claims made by lobby groups, even those rubber stamped by a firm of accountants. I think the economy would be better served if we operated a much simpler tax regime. Our's is one of the most complicated, if not the most complicated, tax systems in the world, and is one of the biggest deterrents to starting a business in the first place. Everybody agrees that we need to simplify it, but too many people want to defend their preferential treatment which complicates it. My opinion is that the decision to remove the anomaly on static caravans and pasties was correct. It would have been a simplification, and I can see no reason why businesses selling caravans and pasties should have an unfair tax advantage over businesses selling conservatories and hamburgers. Any concerns about job losses in deprived areas can be addressed by other methods. However, since I1L2T3 was keen to compare the tax on static caravans with the tax on holiday homes earlier I will concede his comparison, and say that I have no problem with the same treatment for both. It would be fair (for I1L2T3), and simple (for me), if static caravans are taxed the same as holiday homes and purchasers of static caravans are charged stamp duty and pay council tax on the same basis. The removal of any tax 'anomonly' only makes sense if you consider it in isolation from any other factors. If you consider the economic impact in the real world then in some cases it stops being logical to remove it. In the case of static caravans the job josses could have been significant. Yes the KPMG report highlighted this but the key reasons the report emphasises would have been pretty much the same as when Peter Lilley made his comments in 1989. As for why the report was commissioned to begin with then yes it is lobbying which is a reasonable thing to do. Every industry lobbies government to keep government up to speed with the challenges faced. Again, that is the real world. Link to comment Share on other sites More sharing options...
MrSmith Posted June 3, 2012 Share Posted June 3, 2012 A loophole that stayed in place for 39 years? Really? Reviewed frequently, fully documented as part of the VAT regime? I agree that when the VAT was waived initially it may have been for more specific reasons. But then it will have become clear that it had other economic benefits. Then government after government agreed to keep the waiver in place and each of them would have known about the impact on manufacturing and tourism. This was made absolutely clear by Peter Lilley in 1989: http://www.streetsweb.co.uk/about-us/hot-topics/the-implications-of-imposing-vat-on-caravan-tax In 1989, Peter Lilley, the then Economic Secretary to the Treasury said, ‘There is no question of withdrawing zero-rating from the purchase of static caravans.’ So, far from correcting an anomaly, it is actually anomalous of the Government to attempt to change what they had previously decided most deliberately to do, treat static holiday homes as zero rated for VAT purposes. I repeat, not a loophole. Most tax loopholes have been in place for a long time, so by your definition there can't be any tax loopholes because they are all either deliberate or been in place for some time. Link to comment Share on other sites More sharing options...
I1L2T3 Posted June 3, 2012 Share Posted June 3, 2012 Most tax loopholes have been in place for a long time, so by your definition there can't be any tax loopholes because they are all either deliberate or been in place for some time. Like I said I don't agree that it is a still a loophole. It may have started off being exploited as one but it eventually became an integral and deliberate aspect of the VAT regime. Link to comment Share on other sites More sharing options...
Mecky Posted June 3, 2012 Share Posted June 3, 2012 Most tax loopholes have been in place for a long time, so by your definition there can't be any tax loopholes because they are all either deliberate or been in place for some time. That's probably because most taxes have been around for a long time. Not sure the same can be said for these modern taxes. Link to comment Share on other sites More sharing options...
Leah-Lacie Posted June 9, 2012 Share Posted June 9, 2012 There no difference in VAT between eating in and eating out. That was scrapped years ago (about 20 from memory), hence my reference to fish'n chips earlier. Some places still ask you, I've no idea why, possibly because they are still using a 20 year old till. In town today with the OH and the kids, and the daughter wanted a sausage roll so he took her into Greggs - I noticed when passing a few of them they have been refurbed with some stools added. The woman asked OH if hes eating in, or taking out. He said "Why? Is it cheaper to eat in?" - and she replied "No, you have to add 20% VAT on if you eat in" So they have brought it back in me thinks, or, Greggs are getting round the hot/cold rules by figuring that if you eat in, the food is warmer so adding VAT? Link to comment Share on other sites More sharing options...
Mecky Posted June 9, 2012 Share Posted June 9, 2012 In town today with the OH and the kids, and the daughter wanted a sausage roll so he took her into Greggs - I noticed when passing a few of them they have been refurbed with some stools added. The woman asked OH if hes eating in, or taking out. He said "Why? Is it cheaper to eat in?" - and she replied "No, you have to add 20% VAT on if you eat in" So they have brought it back in me thinks, or, Greggs are getting round the hot/cold rules by figuring that if you eat in, the food is warmer so adding VAT? I just refuse point blank to go into Greggs these days. It's not because of any tax, it's because there's always some wally ordering a coffee, which takes all day. Maybe they should have a seperate queue for them. Link to comment Share on other sites More sharing options...
taxman Posted June 9, 2012 Author Share Posted June 9, 2012 There no difference in VAT between eating in and eating out. That was scrapped years ago (about 20 from memory), hence my reference to fish'n chips earlier. Some places still ask you, I've no idea why, possibly because they are still using a 20 year old till. VAT is charged at standard rate for food and drink supplied to be consumed on the premises. "Where you make sales of cold food to be taken away from your premises, but also have on-site facilities where food can be consumed, you will need to apportion your sales of cold food between those consumed on the premises (standard-rated) and those taken-away (zero-rated)." Link to comment Share on other sites More sharing options...
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