Designed by French tax expert Maurice Lauré in the postwar years and first levied in the UK on April Fools' Day 1973, VAT is now the government's third largest source of revenue after income tax and national insurance.
VAT is 40 years old – and now has middle-age spread
Levy has raised around £1.6tn but has become a headache for business with hopes for a cheap and simple EU tax in the pas
But what started out as a simple, easy to collect tax – a low, flat rate imposed on most goods and services – has become increasingly complex, with exemptions for everything from children's clothes to Jaffa Cakes.
"The initial idealistic hope that it would be a simple tax, easy to apply, has constantly been eroded because there are always special lobbies," said Deloitte tax expert Daniel Lyons. "Politics and economics got in the way of simplicity."
10 comments:
Lobby groups bribing/arm twisting our politicians got in the way of simplicity surely?
I would say Death Duties or as it is now Inheritance Tax just shades VAT in the sheer nastiness of it.
Although VAT comes close as it affects everyone and is regressive.
Mr Laure will burn in Hell I hope , But what people forget is it was introduced in France to combat widespread income tax avoidance. It was an instead of Tax not an additional tax. With the introduction of PAYE in the UK the reason for introducing it is non existent and it becomes just another way for the bastards to get more of our money
One good thing about VAT is that it shows who's really in charge: those who have wangled an exemption, landowners (food and property) and the moneymen (bankers and other financial services).
You'd be pretty safe in saying that not too many will be noting that b'day.
C'mon. It's stealthy, you can have lower marginal income tax rates and still get govt revenues approaching 50% of GDP, none of the important people objects to it (they are exempt anyway), and you can claim it's a tax on consumption (which has slightly negative connotations). What's not to like?
" "The initial idealistic hope that it would be a simple tax, easy to apply, has constantly been eroded because there are always special lobbies," said Deloitte tax expert Daniel Lyons."
Idiot. VAT was never simple. It replaced a nice simple sales tax with a bureaucratic nightmare that must have robbed our country of hundreds of billions, if not trillions, of output.
It was designed as a nice neat theory, with no thought whatever as to the practicalities of levying it.
It was designed by someone who clearly thought that "trade" is dirty and disreputable.
BB, yes, see Bayard's comment.
PC,the big difference between IHT and VAT is IHT raises under £3 billion a year and VAT raises over £100 billion. And as stupid or unprincipled as IHT might be, it doesn't destroy millions of jobs and put businesses out of business.
JH, we just did, didn't we?
Kj, nothing about VAT is to like. Nothing.
AC, VAT is Sales Tax. That's why it is so damaging. The bureaucracy of VAT is just the shit icing on the shit cake.
@Mark
you are correct in the numbers. It's just depends on how I'm feeling at the time. I'll never be in the position to be burdened by IHT it's just the thought that you can work and strive to leave something for your family and the govt swoops in for it's cut ( of already taxed several times monies)before the body is even cold. (yes I know the current rates are an essentially an envy tax introduced by Labour to destroy the Landed Classes.)
I also feel the same about Capital Gains Tax .
but yes all in all , VAT is the 'Worst' Tax ever
PC: "I know the current rates are an essentially an envy tax introduced by Labour to destroy the Landed Classes"
Where do you get that from?
The entire system of taxing earned income (but not rental income) at high rates (and exempting land income from VAT) is to prop up the Landed Classes. This is Home-Owner-Ism!
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