L’aumento dell’Iva avrebbe un “serio impatto negativo”, avvertono gli economisti
Hiking VAT would have ‘serious negative impact’, economists warn Reeves
di tylerthe-theatre
L’aumento dell’Iva avrebbe un “serio impatto negativo”, avvertono gli economisti
Hiking VAT would have ‘serious negative impact’, economists warn Reeves
di tylerthe-theatre
25 commenti
This must be bad comedy? How can you increase an already insane 20% tax on f’ing everything?
This government MUST cut government spending. The hard decisions must be made now or must be made later. Why make it far worse than it needs to be?
Desperate stuff. If they want to raise taxes then they’ll have to raise income taxes. Lower the tax free threshold and increase the basic rate.
insanity, the hospitality industry is on its knees as it is.
When taxes are the only solution left… you know the country is fucked.
I’m surprised there’s never been a stepped VAT – e.g. lower it a little on stuff under £50, raise it on stuff over £40K
You want to buy that Porsche? Thank you for your extra contribution to HMRC
That’s how you enrage r/HENRYUK 🙂 (and possibly destroy the luxury car market I guess)
Here is the GDP per capita of the G7 countries. IE the world’s leading economies.
[https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=GB-FR-DE-IT-JP-CA-US](https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=GB-FR-DE-IT-JP-CA-US)
Notice something? It’s not the UK that is standing out, most of them have been clustered round the same low growth per capita for 18 years. Pretty much since the GFC.
There is a global problem with the major economies all struggling with deindustrialisation, cheaper places to make everything and the US gobbling up all the high end tech industries.
The UK is not alone, there are economic crises in Japan, Germany, France, Italy, Canada etc. We have had low growth with major rises in our debt to GDP ratio thus big jumps in debt repayments, big jumps in pension costs and healthcare. Everything else has needed to be cut while taxes have gone up.
This is not a problem for one chancellor or one budget, this is a long term problem we have been refusing to face since 2008.
Here is labour productivity, that is how much money the economy gains for one hour of work.
[https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/labourproductivity/timeseries/lzvb/prdy](https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/labourproductivity/timeseries/lzvb/prdy)
Broadly speaking this is how much money every UK worker will get to spend on themselves plus be taken for tax plus companies can take their profits from. This is what one hour of work produces.
Its barely shifted in 18 years. So the government has to take more to pay debts, pensions and healthcare. This is our economic crisis in as close to one chart as you can get it. Get this rising and you will no longer have an economic crisis, keep this flat and we are into serious decline territory.
These charts should be front and centre of the economic debate instead we are arguing about a couple of percent on VAT. The old “picking up pennies in front of a steam roller” was about a different crisis but really reflect the current UK debate on the economy.
It’s a widespread problem, its fundamentally a lack of productivity growth.
VAT is a regressive tax and unless it is raised only for high value luxury goods, raising is the worst thing they could do to low and average income people.
How much do they want to squeeze people? There’s no juice left.
*”as the chancellor weighs which taxes to put up at next month’s Budget to plug a £30bn shortfall”*
Rejoining the EU would allow the government to collect **£20-£45 billion/year in tax revenue** from all the extra economic activity.
Traditionally the Tories raised the vat and labour low it, just shows that this current labour government is just the Tories with a different colour flag.
Anyone remember when it went down and then back up temporarily?
There’s definitely room for reform of VAT. There’s lots of designer childrens clothing which is zero rated despite costing hundreds of pounds.
Introducing a price limit on zero rated items would be a sensible move, rather than uprating everything.
Raising VAT at this point is nothing short of punishing productivity. Hospitality venues and tradesmen are already battling wafer‑thin margins, with wages, rent, energy, and materials eating up most of their turnover. Because thresholds are tied to sales rather than profits, they’re pushed into higher obligations long before they see any real gain. Meanwhile, consultants with minimal overheads remain largely untouched, exposing just how uneven the system has become.
And let’s be honest: it’s not just businesses that pay the price. Every VAT hike gets passed down the line, meaning already‑squeezed working people are the ones forced to swallow the increase. Every pint, every meal out, every home repair becomes more expensive, eroding disposable income and dampening demand. If we want a genuinely productive economy, we should be rewarding those who graft, hire, and train, not taxing them, and their customers, into submission.
VAT is a nonsense tax that adds complexity but doesn’t help fairness. On paper it should be a tax on luxury/non-essential purchases.
But instead we still have to differentiate between a cake and biscuit because VAT treats one as a luxury and one as an essential.
We then add extra taxes onto “luxuries” in the form of sugar taxes or alcohol duty or tobacco products duty.
I recall the times of VAT at 5 and 8% lets go back to the good old days,
Well i dont but i have read about it… do that and introduce a wealth tax above £5M to counter it.
While it would be an awful idea, the article isn’t suggesting it’s actually something Reeves is planning. Just that it would be a bad idea.
Instead of increasing the standard rate. They could focus on zero/rate goods and services and bringing them upto the next rate.
Passenger Transport is currently zero rate which means someone that pays for a standard ticket and someone that pays first class pay the same rate of VAT. This also includes private jets which are zero rated subject to criteria.
Luxury property renovations are also included in 5% (subject to criteria) – make it 20% based on a given metric
This country is in trouble, we were better off with that lettuce
People hate VAT rises because they have to pay it. Much prefer just to tax others instead.
Here’s a thought… lower all taxes and abolish others… cut back on government spending… reorientate the economy slowly and carefully
Main problem with VAT is the registration threshold, where 1p more sales makes you immediately 20% more expensive for no extra profit (well more like 11%ish when you allow for costs but anyway). Lots of businesses / trades literally take months off just to keep below this number. Either make the number much bigger or much smaller – so VAT becomes a thing for either only larger businesses or all of them.
……. So why do they even think Labour will raise the headline VAT rate?
At this rate I wonder if they will suddenly force all landlords to be VAT registered and charge VAT on rent and mortgage and loan interest.
They can claim the poorest get their housing paid for.
(Not that I support the above or think it is likely)
Like they care about any negative impacts to economy with anything they do. In a year people will be begging for government change.
Reading through comments it staggers me how bad of an understanding of the economy folks generally have.
This isn’t an issue that can be resolved by slashing government expenditure. Surely the last few years of the states show that just makes things worse?
No, our whole tax system needs an overhaul.
I moved from the UK to the US and sales tax in my city is 8.25%.
The idea of a 20% tax on every good and service you buy not being enough is absurd.