Hot pies - plus VAT

[bbishop]

Us Wiganers are hardest hit - we're all going to die of starvation !!!!!!!!!!!

 

Pie Riots soon, no gravy train for us !!!!!!!!!

 

Brit15

Suggest you frequent the pie shop at the far end of the pier.

 

Bill

[Ramblin Rich]

 

The "transaction/purchase tax" does not have to be the temporary 20% or even 17.5% (or anywhere near it) as all the zero rated item will bring in new tax the headline rate could be reduced to make it fiscally neutral. OK so you will pay more for food, children's clothes, newspapers but would pay less for petrol, and just about everything else you pay for. There would also be big savings on the taxes currently evaded on biriani sales

 

I'd buy that for a pound (or £1.10 with tax added...)

Reading through the thread the same thought was forming in my mind. It seems eminently sensible, I suppose the biggest objections would come from all the accountants & taxmen whose work would suddenly be somewhat reduced due to a simpler system requiring less administration - so it would sadly probably get a response. Shame really....

 

PS - "fiscally neutral" [starts filling in buzzword bingo card]

[BR60103]

In Ontario, the tax used to be on meals but not groceries. One muffin was part of a meal and taxed; six (or more) were groceries and not taxed.

I won;t try to confuse you with the current system as I can't follow it. To make it simpler, almost everything is taxed by 2 governments.

[Trevellan]

Does Captain K know about this? Will it affect the Taunton Members Day pasty budget? This could be a major issue of regional importance.

[Baby Deltic]

It's OK, Trevor. VAT means 'Void At Taunton' so CK should be OK with his parsnip pies and pasties.

[Horsetan]

....lamb biriani.....

 

I'm really hungry now. Anyone fancy a curry?

 

 

..... "fiscally neutral" [starts filling in buzzword bingo card]

 

[6959]

In Ontario, the tax used to be on meals but not groceries.  One muffin was part of a meal and taxed; six (or more) were groceries and not taxed.

I won;t try to confuse you with the current system as I can't follow it. To make it simpler, almost everything is taxed by 2 governments.

 

In Winnipeg there are three levels of sales tax: GST, PST and hotel levy. Some provinces have HST but I thought that was something that only applied to women.

[Jinty3f]

VAT will apply to any pie or pie- like object which is served warmer than "ambient room temperature".

 

Does this mean that my pie could cost me less in summer than winter, when the ambient temperature is lower?

[JohnR]

Basically everything that Gregg's sells you is/was VAT free, while the burger and chips you buy from McDonalds or the fried chicken from KFC is not.

 

Interestingly, McD's and KFC are advisors to the Government on their healthy eating plans, while Greggs is not. Must be a co-incidence.

[Guest Natalie Graham]

McD's and KFC are advisors to the Government on their healthy eating plans.

 

 

You couldn't make it up, could you?

[industrial]

Does this mean that my pie could cost me less in summer than winter, when the ambient temperature is lower?

 

But most likely you will be eating less hot pies in the summer than in the winter.

[hmrspaul]

In Winnipeg there are three levels of sales tax: GST, PST and hotel levy. Some provinces have HST but I thought that was something that only applied to women.

 

I don't remember about Canada, but the US of A is very difficult, with no tax added in any signs. Presumably locals have a mental ready reckoner that adds the 6.32% (or whatever) but visitors ... just feel ripped off. At least in the UK displayed prices include VAT.

 

What hasn't been mentioned is the anomoly that small companies with a turnover of less than £73K do not have to register for VAT - they cannot claim back on what they buy in, and we all have to watch they are not collecting but pocketing the VAT on their sales! It does mean some of the little cottage industries we deal with are able to produce cheaper goods.

 

Paul Bartlett

[Kenton]

What hasn't been mentioned is the anomoly that small companies with a turnover of less than £73K do not  have to register for VAT - they cannot claim back on what they buy in, and we all have to watch they are not collecting but pocketing the VAT on their sales! It does mean some of the little cottage industries we deal with are able to produce cheaper goods.

 

Yes, this is both a great disincentive to businesses with a turnover at the threshold - why make the effort to sell a little over the threshold and then have to incur all the extra red tape, accounting problems and VAT risk?

 

There is also a high risk of tax evasion and massive penalties when/if caught. Not to mention the unfairness of the system.

[industrial]

 

What hasn't been mentioned is the anomoly that small companies with a turnover of less than £73K do not have to register for VAT - they cannot claim back on what they buy in, and we all have to watch they are not collecting but pocketing the VAT on their sales! It does mean some of the little cottage industries we deal with are able to produce cheaper goods.

 

Paul Bartlett

 

Sorry but if they are not registered for VAT they will be no VAT on their sales to be pocketed as there is no VAT at all for them to pocket.

[hmrspaul]

Sorry but if they are not registered for VAT they will be no VAT on their sales to be pocketed as there is no VAT at all for them to pocket.

 

Unless they add the VAT anyway!

 

It is an anomoly as Kenton mentions. It is important - the comments (I admit intended as jokes) about pies at shows - didn't mention that a club won't have to worry about VAT on their hot or cold pies (well that's my understanding). But, of course, if they use a professional caterer then it is likely that they will have to charge VAT. Catering appears to be a right mess, because there are many small one person companies operating to provide meals to private homes, offices etc. and whether they have to register or not must be quite a difficulty.

 

It is a mess - but then so are several other items in this budget. Just listening to Radio 4 and the problems arising with the kids allowance is dreadfully complex and hundreds of thousands of PAYE customers of the revenue, who don't have to do a tax return will now have to.

 

Paul Bartlett

[45156]

Another odd one is that self employed hairdressers working in a salon (not employed by the salon owner), pay the salon owner a chair rental, which is a daily payment to use the salon's facilities. The hairdresser then gets most of the cost of the service being provided and the salon owner gets a small percentage of the charge to the client. This chair rental is now subject to VAT. Most large salons also are VAT registered, so they charge VAT on the whole of the cost of the service even if the chair rental is not itself VATable.

 

Oddly enough I was speaking to the owner of the hairdressers that I use, and this was so tucked away in the budget that he hadn't heard about it, and he's got four very large shops (two with over 50 working chairs) and is well into VAT, and half his business is chair rental related - so he was quite pleased that I pointed this out to him - now I'm angling for a free haircut!

[Guest Natalie Graham]

Sorry but if they are not registered for VAT they will be no VAT on their sales to be pocketed as there is no VAT at all for them to pocket.

 

There is VAT on everything except those items which are zero rated. For goods sold by businesses with turnovers less than the threshold the VAT is not collected by the government but it still applies to the goods in question. If a VAT registered business buys goods from a non registered business it can still claim back the VAT paid on those goods

[hmrspaul]

There is VAT on everything except those items which are zero rated. For goods sold by businesses with turnovers less than the threshold the VAT is not collected by the government but it still applies to the goods in question. If a VAT registered business buys goods from a non registered business it can still claim back the VAT paid on those goods

 

Thanks, interesting I hadn't realised that a small manufacturer (below threshold, non VAT registered) would make the VAT as a profit when he sold something to me, which is what I understand you are suggesting - surely if he/she manufacturers it - which is the example I am using - he/she can charge whatever they like. Do they have to show a with and without VAT charge for, say a large VAT registered retailer to be able to claim back, as they have to add VAT to the price when they sell it on.

 

So, is VAT going to be charged on those hot pies sold by the local non registered club, even if the pie is made by a club member (etc.) and not bought in?

 

No wonder no one wants to open small businesses in this country!

 

Paul Bartlett

Who should have kept out of all of this!

[industrial]

There is VAT on everything except those items which are zero rated. For goods sold by businesses with turnovers less than the threshold the VAT is not collected by the government but it still applies to the goods in question. If a VAT registered business buys goods from a non registered business it can still claim back the VAT paid on those goods

 

You can only reclaim (in most cases) the VAT on the goods if they are VAT registered ie got a VAT number. You can not reclaim off any body else as there will be no VAT on those goods.

 

If a model shop has two ranges of wagon kits and both are on sale for the the same price of £7.20 ie they cost him £4.80 each. One supplier (A) he will get the goods at £4.00 + VAT and the non VAT supplier ( one he will get the goods for £4.80. In the case of supplier (A) he will be able to reclaim the £0.80 VAT back but in the case of supplier ( he will not be able (legally) to reclaim the VAT back as there is no VAT on the goods.

 

Yes in both cases they will be standard rated for VAT but the VAT is only on the goods when the supplier is VAT registered. In the case of supplier ( he should be able to sell his kits to the shop for £4.40 as they will be costs that he will have to pay VAT on but be unable to reclaim it.

[Guest Natalie Graham]

Yes a manufacturer can charge what they like but the item is still subject to VAT just as if a registered business had made it. HMRC don't collect it and the non-registered business can't claim back VAT on expenses. Below the threshold the effort involved isn't considered worth the sums involved. In most cases the business wins out unless you are using VAT rated materials to make zero rated items.

[Guest Natalie Graham]

I thought I hade better look this up and I was wrong. HMRC says VAT must not be charged by a non-registered business. http://www.hmrc.gov.uk/vat/forms-rates/rates/rates.htm

[industrial]

Yes a manufacturer can charge what they like but the item is still subject to VAT just as if a registered business had made it. HMRC don't collect it and the non-registered business can't claim back VAT on expenses. Below the threshold the effort involved isn't considered worth the sums involved. In most cases the business wins out unless you are using VAT rated materials to make zero rated items.

 

No Natalie.

 

I have had a new web site done and as they are not registered for VAT. So there is no VAT I can claim back as I am VAT registered. VAT is only on goods if you are VAT registered.

 

Farming is a good example of exempt goods where the farmer is VAT registered as most of the inputs have got VAT on but the sales are exempt for now.

[Kenton]

I thought I hade better look this up and I was wrong. HMRC says VAT must not be charged by a non-registered business. http://www.hmrc.gov....rates/rates.htm

 

This is absolutely correct.

VAT can only be charged by a registered business. Any unregistered business charging or claiming to charge VAT is breaking the law and will if/when caught be liable to prosecution for fraud. There have been many and doubtless be many more such cases. The penalty sought for such fraud tends to be a prison term and as we all know ignorance is no defense.

 

On the other hand claiming the VAT you have paid on business goods and services in your accounts whilst being non-registered is not fraud it is simply accounting. A non-registered business is allowed to claim the VAT paid against the profit.

 

So in the above example supplier B is simply pricing his goods at £4.80 and is more expensive than supplier A pricing at £4. The tax for VAT purpose depends on what the modelshop sells each of them for.

 

As for hairdressers! They have to be very careful. HMRC just loves a fight with these cash rich business knowing full well that the scheme is abused and that the taking invariably understated. They are also ripe for a PAYE investigation as the scheme is frequently used to disguise true employment. Again, HMRC take hostages in such cases, and just love a fight. If only one of the hairdressers doesn't understand the rules of operation they can find themselves party to an extensive investigation into their and the renting hairdresser's affairs.

 

In the days when I did tax consultancy for a living I had two such clients made bankrupt, simply as they did not understand the rules - or as HMRC preferred to see it, know the rules and were evading tax.

[pH]

I don't remember about Canada, but the US of A is very difficult, with no tax added in any signs. Presumably locals have a mental ready reckoner that adds the 6.32% (or whatever) but visitors ... just feel ripped off. At least in the UK displayed prices include VAT.

 

When GST (the equivalent of VAT) was introduced in Canada, retailers were given the option of showing prices with the GST included, or without. A very few chose to include GST in the published price. That didn't last long. Despite advertising quite clearly that GST was included, people saw their prices as being higher than their competitors', and they lost business.

 

I think there's also a wish by retailers to make it clear that not all the cost of an item is due to them. The GST - the government's take - is shown as a separate line on a bill or till receipt. (As is the PST - provincial sales tax - if applicable.)

[hmrspaul]

When GST (the equivalent of VAT) was introduced in Canada, retailers were given the option of showing prices with the GST included, or without. A very few chose to include GST in the published price. That didn't last long. Despite advertising quite clearly that GST was included, people saw their prices as being higher than their competitors', and they lost business.

 

I think there's also a wish by retailers to make it clear that not all the cost of an item is due to them. The GST - the government's take - is shown as a separate line on a bill or till receipt. (As is the PST - provincial sales tax - if applicable.)

 

Yes I realise the political nicety behind this idea of showing the sales taxes separately - especially in the States where they differ between States. But it does come as quite a shock - hotel bills seem to add about 20% or more to the rate quoted via websites etc.

 

In the UK this shows up most with air tickets, where a £5 ticket can quickly become £80 - (Leeds to Krakow!] because of the various taxes - still remarkable value!

 

Paul Bartlett

 

Paul Bartlett