Tag Archives: vat

What Liberal Democrat members think of different tax policies

By Mark Pack | Published 5th October 2011 - 1:50 pm

Lib Dem Voice has polled our members-only forum to discover what Lib Dem members think of various political issues, the Coalition, and the performance of key party figures. Some 550 party members responded, and we’re currently publishing the full results.

Cut income tax and VAT but raise taxes on property: that’s the message from Liberal Democrat party members in our latest survey. Some answers to our tax questions are unsurprising, such as the North Korean style (or, for older readers, the Albanian style) majority in favour of raising the personal allowance threshold for income tax to £12,500, approximately equivalent to what a …

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Posted in LDV Members poll | Also tagged , , , , , | 8 Comments

Opinion: A brave tax proposal

By Stuart Bonar | Published 13th August 2011 - 4:15 pm

Back in June Mark Pack suggested that now is a good time to start debating tax ideas for the next manifesto. So, let me throw in two ideas: one brave, one not so brave.

Ready reckoners published online by HM Revenue & Customs [PDF] make it easier to play the role of armchair Chancellor, so that is exactly what I am going to do.

My first idea is to increase inheritance tax by 5% to 45%, raking in an extra £350m, and then spend £300m of that to cut the reduced rate of VAT to 4%.
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Posted in Op-eds | Also tagged , | 16 Comments

Opinion: A hurting Lib Dem and the stagnant economy

By Jonathan Featonby | Published 30th January 2011 - 6:12 pm

For the first time since his election as leader of the Labour party, I found myself agreeing with Ed Miliband during Prime Minister’s Questions this week.

With his new Shadow Chancellor sat next to him and in response to the news earlier in the week that the economy had contracted by 0.5% during the final quarter of 2010, Miliband urged David Cameron to think again over the upcoming spending cuts and VAT rise.

To make matters worse for the Coalition, the outgoing director-general of the CBI accused the government of putting politics before growth. Sir Richard Lambert argued that “politics …

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Posted in Op-eds | Also tagged , | 126 Comments

The VAT rise: a refresher course for Labour

By Stephen Tall | Published 4th January 2011 - 1:58 pm

Today’s increase in VAT from 17.5% to 20% — announced in the Coalition’s emergency budget last year — has triggered a fresh burst of opportunism criticism from Labour. The “wrong tax at the wrong time” claims their leader Ed Miliband.

How Labour’s last Chancellor backed a VAT rise

I suspect there’s a Labour MP we won’t be hearing from today, though: Alistair Darling*, Chancellor until the party’s defeat in May. As Mark Pack noted here last July, Mr Darling was a strong advocate of increasing the rate of VAT in order to tackle the UK’s massive deficit, with The …

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Posted in News | Also tagged , , , | 89 Comments

The IFS answers… Is increasing VAT progressive?

By Mark Pack | Published 25th November 2010 - 12:28 pm

For the final part in our question and answer series with the IFS on a range of questions about their views on government policy it is the turn of VAT. The impact of increasing VAT is an issue on which I’ve changed my mind. I used to think that increasing VAT was a bad idea because it would be a regressive tax change. But when the issue shot up the political agenda earlier this year, it was the IFS’s reasoning that made me doubt that. Here is the current version of that reasoning (which of course is subject to the same …

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Posted in News | Also tagged | 70 Comments

How regressive is the VAT rise?

By Iain Roberts | Published 7th October 2010 - 8:30 am

Labour had been considering it for months before the General Election. The Coalition decided it was necessary after they’d seen the books – much to the discomfort of many Lib Dems. It’s the VAT rise – to 20% on 1st January 2011.

Many people have said that it’s a regressive tax and we should have increased basic rate income tax instead, suggesting that would be fairer.

Is that really true? Partly, but in reality the case is less clear cut.

We don’t pay VAT on food, children’s clothes, books, newspapers, magazines or sporting activities nor will the VAT rise affect …

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Posted in News, Op-eds | 94 Comments

Lib Dem Tim Farron leads campaign for charities VAT exemption

By The Voice | Published 21st July 2010 - 11:12 pm

Third Sector reports:

A Liberal Democrat MP is campaigning to win exemptions from fuel tax and VAT for mountain and cave rescue teams. Tim Farron, the party’s MP for Westmorland and Lonsdale, wants the coalition government to provide rescue teams with a VAT refund each year – a policy that was part of the Liberal Democrat manifesto.

“We’re hopeful,” said a spokesman for Farron. “We’re still awaiting a response from the Treasury, but this is something we can make a strong case for. These are emergency services, and they should be treated differently.”

Andy Simpson, a volunteer with Mountain Rescue, said that

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Posted in News | Also tagged , | 4 Comments

When is a rebellion not a rebellion?

By Stephen Tall | Published 15th July 2010 - 7:30 pm

The Coalition decision to raise VAT was, by some measure, the most controversial aspect of the Government’s first budget. In our recent survey of party members, 42% opposed the move, though 48% endorsed it (however reluctantly) to deal with the deficit.

The party’s MPs have also been wrestling with the issue. The VAT increase was debated on Tuesday night in the Commons – in the end only Colchester’s Bob Russell from the Lib Dems voted against the Government, siding with a Labour amendment.

As Jim Pickard in the FT notes, St Ives MP Andrew George, and four other Lib …

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Posted in News, Parliament | Also tagged , , , | 13 Comments

Alistair Darling wanted to raise VAT

By Mark Pack | Published 14th July 2010 - 8:50 am

Throws a bit of a spanner in the works of the Labour rhetoric about how awful anyone who contemplates raising VAT is:

Amid reported wrangling between No 10 and the Treasury, Lord Mandelson suggested in his memoir that Mr Brown rejected a proposal from the chancellor to raise VAT while Mr Darling quashed calls for any future VAT rises to be ruled out. (BBC)

Mandelson writes that Brown and Darling rowed over economic strategy. He “vetoed point-blank” a proposal from Darling to raise VAT up to 18% or 19%. The then chancellor then blocked a proposal from Brown to rule out

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Posted in Opposition watch | Also tagged , , | 21 Comments

Opinion: A Cornish perspective on the Budget and VAT

By Andrew George MP | Published 8th July 2010 - 9:20 am

As MP for the West Cornwall and Isles of Scilly constituency of St Ives, I am fortunate to represent one of the most spectacular and attractive parts of the UK. However, it is also the poorest region in the country. So Budget proposals are critical to many of my constituents who exist with the reality of low incomes and relatively high living costs.

On a positive note, the Budget put forward by the Coalition Government has much to commend it and for the Liberal Democrats, in particular, to be proud of.

It contains policies the party campaigned for, including: an increase in …

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Posted in Op-eds | Also tagged | 18 Comments

Two Lib Dem MPs rebel over VAT

By Mark Pack | Published 29th June 2010 - 7:37 am

The Guardian:

The coalition faced its first rebellion last night when two Liberal Democrat MPs voted against a budget proposal to increase VAT to 20%.

Bob Russell and Mike Hancock voted with Labour to oppose the increase, which has alarmed many Lib Dems who warned during the election of a Tory VAT “bombshell”.

To shouts of “shame” from the Labour benches, the 2.5% increase in VAT from January was backed by 346 to 270, majority 76. Russell, MP for Colchester, and Hancock, MP for Porstmouth South, had earlier supported a backbench Lib Dem motion demanding a Treasury investigation into the impact on the

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Posted in News | Also tagged , , , | 90 Comments

Opinion: Making VAT fair

By Malcolm Wood | Published 27th June 2010 - 12:20 pm

It has become fashionable in the last few days to describe VAT as a “regressive”, and by implication unfair, tax. This is usually followed by complaint about how hypocritical it is of the Liberal Democrats to agree to an increase in its rate.

But VAT is not, by the simplest definition, a regressive tax. A regressive tax is one where the rate of taxation decreases as the value of the thing being taxed increases. A progressive tax is the other way round. Income tax is progressive, because those on higher incomes pay a higher rate of tax on it. Council tax …

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Posted in Op-eds | Also tagged | 55 Comments

LibLink: Nick Clegg and Danny Alexander on the Budget

By NewsHound | Published 27th June 2010 - 9:19 am

Writing in The Observer Danny Alexander says,

Labour’s approach of denial and complacency would bring higher interest rates, fewer jobs, less growth, more debt. It exposes us to much greater risks of financial irresponsibility – being forced by others to cut harder, with less care and control. That is the position of some European countries – it must never be Britain’s. There is nothing progressive about the consequences of denial and delay.

The coalition has chosen responsibility. We are restoring order to the nation’s finances, credibility to our position internationally, and confidence in our economy that is essential for growth. Having chosen

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Posted in LibLink | Also tagged , , , | 9 Comments

Tory VAT tax rises and Michael Caine … the spoof posters collection

By Stephen Tall | Published 9th April 2010 - 8:20 am

On the day that the Lib Dems tried to smoke out the Tories’ true position on whether they’ll jack-up VAT by 3% – annual cost to the average household, £389 – to pay for their unfunded tax-cuts, David Cameron was joined by a man worth £45m who rather likes the Tories’ promise to cut taxes for the wealthiest at the expense of everyone else.

Full marks to Lib Dem HQ who were smartly on the case to splice the two stories memorably together:

Lib Dem blogger Mark Thompson had his own pithy take on it:

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Posted in General Election, Humour | Also tagged , , | 7 Comments

Nick Clegg reveals Tories’ £13bn VAT bombshell

By Stephen Tall | Published 8th April 2010 - 10:25 am

For the past week, the Tories have been decrying Labour’s plans to raise National Insurance, pledging to reverse the rise but with a startling lack of clarity about how they will pay for it – beyond vague talk of ‘efficiency savings’, the kind of fantasy finance David Cameron and George Osborne would be quick to scorn if other parties tried it on.

Today Nick Clegg is showing that NI cuts may be popular with business – but they have to be paid for by someone, and the most likely people to pay the price of the Tories’ cuts will be …

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Posted in General Election | Also tagged , , , | 21 Comments