GB: Value Added Tax up to 20% in January - Effect on hobby

norvic · **Posted:** Wed Jun 23, 2010 00:36:44 am

The British Conservative-Liberal Coalition government has announced that Value Added Tax (or Sales Tax) will rise to 20% in January, from 17½% currently.

VAT is the tax paid when we buy goods or services. "Essential" items for which we do not have to pay any VAT (because the rate is 0%), such as most food, children's clothing, newspapers and magazines, would remain free from VAT. There are other items and services which are exempt from VAT, including postage stamps at the PO.

How does this affect us?

There is no VAT on books or magazines, so our stamp catalogues will be unaffected, but albums, hagner sheets and accessories will go up, as will the cost of packing materials. A different scheme applies to stamps (other than those sold by the PO) and other collectables (and antiques) which is far too complex to go into here!

Exports are free of VAT, outside the EU. Put simply this means that even albums and accessories should not be charged with VAT if sent to many countries, but the change will affect smaller dealers and suppliers.

The British system does not work in the same way as some other systems. The tax is levied on the whole selling price of goods and services, but registered traders* can take account of the tax paid on their purchases# and they pay the difference to the government. #For registered traders this means that they can deduct from the tax they charge on (for instance) album sales, the tax paid on purchases of computers, consumables, stationery and so on, thus avoiding any major cash-flow problems. The end-user, of course, pays tax on everything taxable. While postage stamps at the PO are not taxable, "postage and packing" or shipping, is charged at the rate applicable to the goods being sent. Thus there will be no VAT on any element of books from Amazon, but CDs will be charged tax on both the unit price and the P&P.

* 'Registered' traders are those with turnover above a certain level (who must therefore charge tax) and any other trader who elects to register to get the benefit of recovering tax paid on his purchases. However, a small business which elects not to register must absorb in their overheads the increased tax they pay on their purchases. So as an unregistered trader, for example, if I buy printer ink, envelopes, stockbooks, glassines from the usual wholesalers I can expect the price of those to increase by 2.127% which will be an addition to my overheads. This might affect the price I charge my customers.

Flying Tiger · **Posted:** Wed Jun 23, 2010 02:27:35 am

Suddenly, the 8.25% sales tax I have to pay does not seem high after all.

norvic · **Posted:** Wed Jun 23, 2010 02:32:07 am

Flying Tiger wrote:

Suddenly, the 8.25% sales tax I have to pay does not seem high after all.

All things are relative. Scandinavian countries have traditionally had high taxes, both direct and indirect, but their welfare and other public services were regarded as superb. You pay for what you get.

ozstamps · **Posted:** Wed Jun 23, 2010 05:51:36 am

Good news for me. :lol:

For decades I have been mailing stamps to UK (and Scandinavian etc) colectors who by buying off me avoid the 17.5% VAT that a local dealer generally charges them.

Stamps in a red/white/blue It'l Reg'd envelope NEVER seem to get stopped by HM Customs as they assume as they are 'small' they contain only papers or photos etc. and nothing of value

On a $1000 Roo etc that is a clear $250 saving for a Scandinavian and now $200 for a Brit.

norvic · **Posted:** Wed Jun 23, 2010 06:08:48 am

ozstamps wrote:

Good news for me. :lol:

For decades I have been mailing stamps to UK (and Scandinavian etc) colectors who by buying off me avoid the 17.5% VAT that a local dealer generally charges them.

Stamps in a red/white/blue It'l Reg'd envelope NEVER seem to get stopped by HM Customs as they assume as they are 'small' they contain only papers or photos etc. and nothing of value

On a $1000 Roo etc that is a clear $250 saving for a Scandinavian and now $200 for a Brit.

Might not be such good news as you think. Standard rate VAT is not chargeable if the trader uses the 'Collectibles' Margin Scheme.

HM Revenue & Customs wrote:

You have to charge VAT when you sell taxable goods. If there was no VAT on your purchase invoice*, you will have to pay HMRC the VAT you charged on your selling price, but you won't have any VAT to claim back on your purchase price.

Margin schemes can save you money if you sell certain types of goods on which there was no VAT for you to reclaim, because they duplicate the effect of standard VAT accounting. In other words, they allow you to pay VAT on the value you added to the goods, rather than on their full selling price.

* You can use a margin scheme if you trade in eligible goods that you've bought under eligible circumstances, for example from businesses or individuals who are not registered for VAT, or from businesses selling under the scheme.

So a UK trader buying from a collector would not pay VAT on the purchase, and would only have to charge the customer VAT on his mark-up. And he can still reclaim VAT on your purchases for other business expenses, such as overheads, repairs, parts or accessories - so that element is not included in his overheads. The dealer's price for a £1000 'roo would at most be £150 (prices here are quoted VAT-inclusive), and could be much less if a margin scheme is used.

Now there is of necessity a certain amount of record keeping to do here, but it might be worthwhile. It's all above my level, but having worked with VAT as part of my job, I do understand the principles.

wolseley16/60 · **Posted:** Wed Jun 23, 2010 09:48:55 am

Typical governments; all out to screw us & the land & the sea out of everything we've got..........

Allanswood · **Posted:** Wed Jun 23, 2010 11:26:18 am

I'm sorry, but for a measly 2½% increase in how many years?, I couldn't care less.

Compared to the increase put on by most companies (not Governments) its no big deal.

I'm far more concerned that Mars bars have doubled in 4 years and my Electicity just went up again by 20%.

norvic · **Posted:** Wed Jun 23, 2010 17:25:51 pm

Allanswood wrote:

I'm sorry, but for a measly 2½% increase in how many years?, I couldn't care less.

Compared to the increase put on by most companies (not Governments) its no big deal.

I'm far more concerned that Mars bars have doubled in 4 years and my Electicity just went up again by 20%.

Quite.

My wife asked what the difference would be if we had to spend £1000 on a new sofa and charis - I said £21 (the difference is NOT a 2½% increase on the old price but 2.12.... ish) and she said it made no difference.

Frank E Ring · **Posted:** Wed Jun 23, 2010 18:20:12 pm

Allanswood wrote:

I'm sorry, but for a measly 2½% increase in how many years?, I couldn't care less.

Compared to the increase put on by most companies (not Governments) its no big deal.

I'm far more concerned that Mars bars have doubled in 4 years and my Electicity just went up again by 20%.

Cheapo imports from East Asian countries have for a decade-and-a-half camouflaged inflation in Europe. The official low inflation rates have been used as a bargaining argument against workers' unions, but now the party is over.

Even the famous Big Mac index has failed to register the sneaking inflation because McD has emphasized a steady Big Mac price but an operational shift in focus to spike priced combo menus that include limited time period theme burgers.

The only thing that seems to get cheaper is stamps (save for East Asian ones :mrgreen:

)

Allanswood · **Posted:** Wed Jun 23, 2010 19:07:40 pm

The "Big Mac"" index is no longer as reliable due to the fact that a Big Mac is not as Big as it used to be!

The easy way to hold to a price is to reduce the size by say 10% and then you can even say - "now even healthier with less grams of fat per serve" and keep the Doctors happy! How do I know? Apart from having eaten there since the 70's I still do regular work for them and see the background info. While most rumours against Maccas are just urban myth they use clever PR firms.

Don't be fooled by "meeting the international standard" that's PR fluff for "we made the buns smaller, so when people see the meat patty on it, the meat patty looks bigger, as no one will notice 10mm off a bun!"

Stampdog · **Posted:** Fri Jun 25, 2010 13:25:13 pm

norvic wrote:

Allanswood wrote:

I'm sorry, but for a measly 2½% increase in how many years?, I couldn't care less.

Compared to the increase put on by most companies (not Governments) its no big deal.

I'm far more concerned that Mars bars have doubled in 4 years and my Electicity just went up again by 20%.

Quite.

My wife asked what the difference would be if we had to spend £1000 on a new sofa and charis - I said £21 (the difference is NOT a 2½% increase on the old price but 2.12.... ish) and she said it made no difference.

Don't forget that the actual amount of tax you pay on your mars bar etc is a percentage of the price so that the tax you pay on the mars bar has ALSO doubled in four years ( assuming VAT is charged on confectionery).
If you think in terms of the amount of tax you actually pay the increase from 17.5% to 20% represents a hefty 14.28% hike. Not insignificant at all in my opinion.

PeterS · **Posted:** Fri Jun 25, 2010 14:20:20 pm

wolseley16/60 wrote:

Typical governments; all out to screw us & the land & the sea out of everything we've got..........

Except that the UK Government has inherited one horrendous deficit that has to be reined in. In Australia we also have a problem, though much much less than the UK. The government has been spending like there is no tomorrow and the bills are now coming due. The solution here is to try to impose a huge new tax on mining. Not going too well, though.

norvic · **Posted:** Fri Jun 25, 2010 18:54:07 pm

Stampdog wrote:

Don't forget that the actual amount of tax you pay on your mars bar etc is a percentage of the price so that the tax you pay on the mars bar has ALSO doubled in four years ( assuming VAT is charged on confectionery).
If you think in terms of the amount of tax you actually pay the increase from 17.5% to 20% represents a hefty 14.28% hike. Not insignificant at all in my opinion.

Peanuts - oh no, that's Marathon/Snickers :lol:

gavin-h · **Posted:** Fri Jun 25, 2010 22:25:21 pm

PeterS wrote:

wolseley16/60 wrote:

Typical governments; all out to screw us & the land & the sea out of everything we've got..........

Except that the UK Government has inherited one horrendous deficit that has to be reined in. In Australia we also have a problem, though much much less than the UK. The government has been spending like there is no tomorrow and the bills are now coming due. The solution here is to try to impose a huge new tax on mining. Not going too well, though.

Yes, we all know who we've INHERITED it from :evil:

I've been asking for 2+ years now, what kind of an IDIOT tries to spend his way out of a recession :shock:

To give a clue, the answer begins with GORDON and ends with BROWN. :arrow:

Even your average schoolboy knows that in a recession, you tighten your belt and ride out the storm. Now thanks to the One Eyed Scottish Idiot, we'll be paying for this idiocy for DECADES. :twisted:

Him and his POND SCUM cronies should never be allowed to govern again. In fact, they should be tried for TREASON which is STILL in theory a Capital Offence. :idea:

Global Administrator · **Posted:** Fri Jun 25, 2010 23:07:42 pm

gavin-h wrote:

Yes, we all know who we've INHERITED it from :evil:

I've been asking for 2+ years now, what kind of an IDIOT tries to spend his way out of a recession :shock:

To give a clue, the answer begins with GORDON and ends with BROWN. :arrow:

Even your average schoolboy knows that in a recession, you tighten your belt and ride out the storm. Now thanks to the One Eyed Scottish Idiot, we'll be paying for this idiocy for DECADES. :twisted:

Him and his POND SCUM cronies should never be allowed to govern again. In fact, they should be tried for TREASON which is STILL in theory a Capital Offence. :idea:

So these minor observations aside Gavin, you feel Labor governments are pretty positive for the UK? :lol:

machin head · **Posted:** Sat Jun 26, 2010 01:05:58 am

the VAT hike will not really directly affect the hobby as far as over the counter sales are concerned, what is worrying is that pensioners' savings and payments will take a clout over the next few years, restricting their buying power, and everyone on a low earning wage or on benefits - as the pensionable age will rise to 66 in 2014 or whenever this will leave only the fittest able to work.

As we all knew the Tories robin-hood-in-reverse "money saving" policies will kick in, the democratic rights of Union members will be restricted and will be blamed for taking action against the "cost-cutting" measures putting ordinary workers and the environment at risk (like BP :twisted:

, Rail companies and British Airways).

Labour had a "softer" more humane plan arranged, designed to hit the fat cats and leave vulnerable people protected, for all their shortcomings you can't blame Labour for the world recession, they were dealing with it, they saved the Banks and Building societies, and in turn the ordinary investors, from ruin - the Tories are panic-mongers, and tricked their way back in - we enter a new dark victorian age....

hertsboy · **Posted:** Sat Jun 26, 2010 01:25:29 am

machin head wrote:

the VAT hike will not really directly affect the hobby as far as over the counter sales are concerned, what is worrying is that pensioners' savings and payments will take a clout over the next few years, restricting their buying power, and everyone on a low earning wage or on benefits - as the pensionable age will rise to 66 in 2014 or whenever this will leave only the fittest able to work.

As we all knew the Tories robin-hood-in-reverse "money saving" policies will kick in, the democratic rights of Union members will be restricted and will be blamed for taking action against the "cost-cutting" measures putting ordinary workers and the environment at risk (like BP :twisted:

, Rail companies and British Airways).

Labour had a "softer" more humane plan arranged, designed to hit the fat cats and leave vulnerable people protected, for all their shortcomings you can't blame Labour for the world recession, they were dealing with it, they saved the Banks and Building societies, and in turn the ordinary investors, from ruin - the Tories are panic-mongers, and tricked their way back in - we enter a new dark victorian age....

Sorry, my Socialist Friend, but you are talking absolute tripe. I'm not going to get into a political argument with you - and in any case this is not the place to do it - and I'm not going to make any rude or insulting comments. But i just hope that the Ozzie members of stampboards know that you are talking drivel.

norvic · **Posted:** Sat Jun 26, 2010 01:27:59 am

Investment income has plumetted over the last two years as rates dropped, so much so that I don't even bother looking to find the best place for savings. And only 2 years ago Halifax offered 12% :!:

(therein lies the root of some of the problems, and yes, I took mine while it was there for the taking!)

Things can only get better, and interest rates increase, so "pensioners' savings and payments will take a clout over the next few years" is probably wrong. They already have taken a clout; better returns in future and increased tax allowances will offset price rises.

As a former public sector worker, I would say that the public sector pay freeze is only what very many private sector workers - and self-employed - have suffered in recent years. As for state pensions, these have to be paid for out of taxes of one sort or another. There are ways to achieve this:
- increase the contributions;
- decrease the outgoings.

Decreasing the outgoings can only be achieved by reducing the period for which the pension is paid. Continuing medical advances which keep people alive for longer must be offset by raising the statutory retirement age, otherwise the pensions will be paid for longer. The only alternative is to increase taxes to raise the inputs - or a combination of both these measures. You can't get anything for nothing. Take off the

and welcome to realities of the 21st century.

machin head · **Posted:** Sat Jun 26, 2010 02:37:23 am

hertsboy wrote:

machin head wrote:

the VAT hike will not really directly affect the hobby as far as over the counter sales are concerned, what is worrying is that pensioners' savings and payments will take a clout over the next few years, restricting their buying power, and everyone on a low earning wage or on benefits - as the pensionable age will rise to 66 in 2014 or whenever this will leave only the fittest able to work.

As we all knew the Tories robin-hood-in-reverse "money saving" policies will kick in, the democratic rights of Union members will be restricted and will be blamed for taking action against the "cost-cutting" measures putting ordinary workers and the environment at risk (like BP :twisted:

, Rail companies and British Airways).

Labour had a "softer" more humane plan arranged, designed to hit the fat cats and leave vulnerable people protected, for all their shortcomings you can't blame Labour for the world recession, they were dealing with it, they saved the Banks and Building societies, and in turn the ordinary investors, from ruin - the Tories are panic-mongers, and tricked their way back in - we enter a new dark victorian age....

Sorry, my Socialist Friend, but you are talking absolute tripe. I'm not going to get into a political argument with you - and in any case this is not the place to do it - and I'm not going to make any rude or insulting comments. But i just hope that the Ozzie members of stampboards know that you are talking drivel.

May I remind the Ozzie members of stampboards that it was the same old class ridden Tory policies of a bygone age that drove many to emigrate to Australia (and Canada) in those darkest of days, and many will follow in the future :wink:

Come the Revolution you will be first against the wall... :twisted:

hertsboy · **Posted:** Sat Jun 26, 2010 03:14:12 am

May I remind the Ozzie members of stampboards that it was the same old class ridden Tory policies of a bygone age that drove many to emigrate to Australia (and Canada) in those darkest of days, and many will follow in the future :wink:

Come the Revolution you will be first against the wall... :twisted:

[/quote]

Well all I can say is that we did those guys a favour! I'd much rather be living in Oz or Canada than in our poor wrecked country.

Now I see why you have a RED 4d stamp as your Avitar .... but it least it has the Queen on it! So you are not beyond redemption!

Live and let live, I say, but my worry is that the poor Ozzies will believe what you're telling them! It ain't true guys! Now we Tories are back at the help things will be OK again .. just like they were under Maggie....

:mrgreen:

norvic · **Posted:** Sat Jun 26, 2010 03:58:44 am

[quote="hertsboy'Now we Tories are back at the help things will be OK again .. just like they were under Maggie....
[/quote]
Ooops, there goes what's left of the family silver.

hertsboy · **Posted:** Sat Jun 26, 2010 04:33:21 am

norvic wrote:

[quote="hertsboy'Now we Tories are back at the help things will be OK again .. just like they were under Maggie....

Ooops, there goes what's left of the family silver.[/quote]

Didn't know there was any left after Mr B pawned it all!

:mrgreen:

PeterS · **Posted:** Mon Jun 28, 2010 07:32:43 am

Global Administrator wrote:

gavin-h wrote:

Yes, we all know who we've INHERITED it from :evil:

I've been asking for 2+ years now, what kind of an IDIOT tries to spend his way out of a recession :shock:

To give a clue, the answer begins with GORDON and ends with BROWN. :arrow:

Even your average schoolboy knows that in a recession, you tighten your belt and ride out the storm. Now thanks to the One Eyed Scottish Idiot, we'll be paying for this idiocy for DECADES. :twisted:

Him and his POND SCUM cronies should never be allowed to govern again. In fact, they should be tried for TREASON which is STILL in theory a Capital Offence. :idea:

So these minor observations aside Gavin, you feel Labor governments are pretty positive for the UK? :lol:

That is certainly the impression I am left with Glen. :lol:

PeterS · **Posted:** Mon Jun 28, 2010 07:36:09 am

machin head wrote:

hertsboy wrote:

machin head wrote:

the VAT hike will not really directly affect the hobby as far as over the counter sales are concerned, what is worrying is that pensioners' savings and payments will take a clout over the next few years, restricting their buying power, and everyone on a low earning wage or on benefits - as the pensionable age will rise to 66 in 2014 or whenever this will leave only the fittest able to work.

As we all knew the Tories robin-hood-in-reverse "money saving" policies will kick in, the democratic rights of Union members will be restricted and will be blamed for taking action against the "cost-cutting" measures putting ordinary workers and the environment at risk (like BP :twisted:

, Rail companies and British Airways).

Labour had a "softer" more humane plan arranged, designed to hit the fat cats and leave vulnerable people protected, for all their shortcomings you can't blame Labour for the world recession, they were dealing with it, they saved the Banks and Building societies, and in turn the ordinary investors, from ruin - the Tories are panic-mongers, and tricked their way back in - we enter a new dark victorian age....

Sorry, my Socialist Friend, but you are talking absolute tripe. I'm not going to get into a political argument with you - and in any case this is not the place to do it - and I'm not going to make any rude or insulting comments. But i just hope that the Ozzie members of stampboards know that you are talking drivel.

May I remind the Ozzie members of stampboards that it was the same old class ridden Tory policies of a bygone age that drove many to emigrate to Australia (and Canada) in those darkest of days, and many will follow in the future :wink:

Come the Revolution you will be first against the wall... :twisted:

We have a few we would like to return.

And if you even think about sending Gordon Brown out here then ready yourselves for war!

PeterS · **Posted:** Mon Jun 28, 2010 07:39:20 am

hertsboy wrote:

May I remind the Ozzie members of stampboards that it was the same old class ridden Tory policies of a bygone age that drove many to emigrate to Australia (and Canada) in those darkest of days, and many will follow in the future :wink:

Come the Revolution you will be first against the wall... :twisted:

Well all I can say is that we did those guys a favour! I'd much rather be living in Oz or Canada than in our poor wrecked country.

Now I see why you have a RED 4d stamp as your Avitar .... but it least it has the Queen on it! So you are not beyond redemption!

Live and let live, I say, but my worry is that the poor Ozzies will believe what you're telling them! It ain't true guys! Now we Tories are back at the help things will be OK again .. just like they were under Maggie....

:mrgreen:

[/quote]

In Australia the tradition goes that Labor gets in, stuffs up the economy and then gets kicked out. The Coalition is elected and makes all the hard decisions and gets everything back on a sound footing. Then they, eventually, get kicked out and Labor is back in and around we go again.

Jack · **Posted:** Mon Jun 28, 2010 07:49:05 am

As someone who has lived in both countries for significant times--

Politics is boring and should not happen on stamp threads but as it's happening I'll indulge; the only reason Oz did well recently is that China bought mountain loads of minerals, nothing to do with whichever party was in power.

Oz had decent social services, votes for women for many years before the UK due to early Labour parties. Such things were all / still are under attack in the UK. The main business group here still argues against the recently introduced minimum wage (Australia pre 1900?) as an example.

Overall Oz has a belief (supported by govt) in a decent go for all which is not supported by the class bound nature (overall) of the UK (I really here mean England; Wales / Scotland / Cornwall are much mor e'Oz' in attitude')

hertsboy · **Posted:** Mon Jun 28, 2010 08:52:55 am

Jack wrote:

As someone who has lived in both countries for significant times--

Politics is boring and should not happen on stamp threads but as it's happening I'll indulge; the only reason Oz did well recently is that China bought mountain loads of minerals, nothing to do with whichever party was in power.

Oz had decent social services, votes for women for many years before the UK due to early Labour parties. Such things were all / still are under attack in the UK. The main business group here still argues against the recently introduced minimum wage (Australia pre 1900?) as an example.

Overall Oz has a belief (supported by govt) in a decent go for all which is not supported by the class bound nature (overall) of the UK (I really here mean England; Wales / Scotland / Cornwall are much mor e'Oz' in attitude')

I don't disagree with you on any of these points, Jack.

Even though I am a true blue Tory, I have great respect for the Labour Party -- it did great service for the working and middle classes in an age when it was needed. And I have no problem with living under a Labour Government.

But what I don't like is when someone starts a rant about British Politics -smearing a decent and honourable Party (I mean the Tory Party - not that I wish to say that the Labour Party is not decent and honouralbe) in front of a mainly Australian audience who do not necessarily know the facts.

hertsboy · **Posted:** Mon Jun 28, 2010 08:54:50 am

[/quote]

We have a few we would like to return.

And if you even think about sending Gordon Brown out here then ready yourselves for war!

[/quote]

No thanks - you can keep 'em. As for Gordon Brown --- now that IS a good idea!

mrboggler · **Posted:** Mon Jun 28, 2010 09:01:26 am

hertsboy wrote:

norvic wrote:

[quote="hertsboy'Now we Tories are back at the help things will be OK again .. just like they were under Maggie....

Ooops, there goes what's left of the family silver.

Didn't know there was any left after Mr B pawned it all!

:mrgreen:

[/quote]

I Had NOTHING TO DO WITH IT,please refrain from using my name in connection with a very distant Scottish Relative
Thanks in advance
Mr B. :lol:


*Click For Our Newest Issues*	*Click for our Current Auction*	Internet Auctions-Buy & Sell Stamps	Melbourne 2013 - May 10-15

Postage Stamp Chat Board & Stamp Bulletin Board Forum

GB: Value Added Tax up to 20% in January - Effect on hobby

Who is online