I heard on the news this morning that the Govt. is refusing to reduce the VAT on energy bills, currently 5%, instead opting to give everyone a £200 loan, repayable over 5 years. This, they say is a fairer option as cutting VAT will benefit everyone, rich or poor.
I'm confused. They are going to give the £200 to everyone, rich or poor and there's no opt out. Even if there was, the money is going to be clawed back via utility bills from everyone. So, their argument that a VAT cut will benefit both rich & poor doesn't work.
They can't even use the argument that public & businesses will benefit if they were to cut VAT, as if a business is VAT registered, they can claim the VAT back. If tyhey're not VAT registered, Utility bills are, for the most part, an allowable expense, meaning they can offset a proportion of the utility bills against any tax due.
There is also mention of a 'rebate' on council tax payments, which it would appear, given that my council is increasing payments by the maximum allowable, is less than the increase.
In these days of spiralling cost of living increases, an increase in National Insurance and mortgage increases, where exactly is the Govt. helping in this crisis?
Rant over (for now)!
Edit,:
Just picked this up frpm a news site,
Labour has urged the Government to slash VAT on fuel bills to save every household an estimated £200.
But ministers have opposed the move, arguing it would be 'regressive' because it would benefit everyone and not just those people who are most in need of support.
Asked if the VAT cut is now officially off the table, Mr Kwarteng said: ‘I was just mentioning the fact that the VAT off fuel is a benefit that is quite regressive actually because rich people will benefit just as much as people on lower incomes.
I'm confused. They are going to give the £200 to everyone, rich or poor and there's no opt out. Even if there was, the money is going to be clawed back via utility bills from everyone. So, their argument that a VAT cut will benefit both rich & poor doesn't work.
They can't even use the argument that public & businesses will benefit if they were to cut VAT, as if a business is VAT registered, they can claim the VAT back. If tyhey're not VAT registered, Utility bills are, for the most part, an allowable expense, meaning they can offset a proportion of the utility bills against any tax due.
There is also mention of a 'rebate' on council tax payments, which it would appear, given that my council is increasing payments by the maximum allowable, is less than the increase.
In these days of spiralling cost of living increases, an increase in National Insurance and mortgage increases, where exactly is the Govt. helping in this crisis?
Rant over (for now)!
Edit,:
Just picked this up frpm a news site,
Labour has urged the Government to slash VAT on fuel bills to save every household an estimated £200.
But ministers have opposed the move, arguing it would be 'regressive' because it would benefit everyone and not just those people who are most in need of support.
Asked if the VAT cut is now officially off the table, Mr Kwarteng said: ‘I was just mentioning the fact that the VAT off fuel is a benefit that is quite regressive actually because rich people will benefit just as much as people on lower incomes.
