VAT on fuel

Chandy ( snipped-for-privacy@totalise.co.uk) gurgled happily, sounding much like they were saying :

Yup.

Nope.

That's the government for you - and others before this one etc.... Good little earner.

Chandy,

You are unfortunately - very correct!

The Chancellor - bless his cotton socks slaps a fuel duty on every litre of liquid gold and then slaps 17.5% VAT on top of that fuel duty - ergo two taxes on fuel - a nice little earner 'innit?

Our Gordon has been asked to slap a 'windfall tax' on the excessive profit of oil companies, the way thing are going at the minute, he ought to slap the same tax on the taxes that HE is getting from the fuel increases and pass that onto the motorist - Ha! Pigs might fly and if by some miracle that he does that - you hear the Friends of the Earth et-al scream in protest.

Brian G

You forgot to add that you`ve already paid tax on your income !

Ooohh yes. If you actually sit down and work it out a family on average earnings running a car will probably give about 65% - 70% of their monthly income in tax - one way or the other.

Income Tax + NI + Duties + VAT + Council Tax + Insurance Premium Tax = not much left for mr and mrs average.

MattF

Hi Colin,

Well we can't moan about *ALL* the taxes our Gordon collects. If we did that, then we'd be sat at the computer all day typing it down - and then we'd miss half of the ones that he's hidden in the woodpile! ROTFLMAO

Brian G

Boy are you quick!

When VAT on fuel was introduced there was a great outcry - don't you remember the phrase "A Tax on a Tax"?

i would like tofind out where the meatings are for the protests. i would love to take part in the motorway go slows

Its meetings.....but just about any motorway any day has go slows although not for this reason!

I'm an electrician and Dave next door is a painter. Dave wants to come out with 30 quid in cash for painting my ceiling. It turns out I've got to bill out an extra £240 of electrical work to generate the extra 30 quid for Dave after I've paid all the taxes. If he spends it on petrol for his car I will have billed out £240 to put £4.20 of petrol into his tank. All the rest (£235.80) will have gone to the government.

I've heard that bartering goods and services is coming back, no doubt this is why.

Look at it a different way, if local groups of tradesmen got together and started a self build scheme to build their own houses, to put itself in the same state the goverrnment would have put a tax on self build houses so that if a person built himself a house he would be forced to build 3 other houses and give them to the government who would then give them away to single parent slappers and dole bludgers who haven't done a days work in their life. ;-)

DG

Derek ^ ( snipped-for-privacy@miniac.demon.co.uk) gurgled happily, sounding much like they were saying :

Let's see the sums, please.

Well I've posted this a couple of times before, this is from memory.

But Earwig-O

I run my own limited company so pay both halves of the NI.

I'm already paying higher rate tax.

Note I said an *extra* 30 quid so it's my marginal rate 40% that applies. Every additional 100 quid I bill out has to support...

• Vehicle E.D. + Road fuel E.D. on fuel used for work
• Business's share of vat etc. on company vehicle purchase & repairs
• My share of GB's 7 billion/yr. pension tax.
• Compensation for paying pensions credit (which I won't get) to people who haven't saved for their own pensions, thereby negating the benefit of the equivalent of £180k of what I've paid in over 19 years (Say £10k/year).
• Serps (Ditto) All a bit empirical I know, but must add up to well over 80%.

Accepting that for the sake of argument it is about 80%, well my mate Dave the decorator (remember him) runs his business exactly as I do. So If I work for 2 days and bill out 500 quid, which yields £100 in spendable cash. I spend that with Dave painting my "outside" my £100 yields just £20 for Dave to spend as he wants. If he spends it on ordinary goods the chancellor will collect £2.98 in VAT on that so my £500 billing only generates £17.02 of true purchasing power for Dave.

Unless, of course he chooses to buy dutyable items then my £500 billing becomes reduced to about sick squid.

Like I said, bartering is coming back in!

Oh, and BTW I forgot insurance premium tax.

DG

And it's bollocks as well. I can see a 10% error in there before I even consider the amount of double-counting you're doing.

clive

So where are *your* figures???

What *exactly* are you trying to say?

I said my £100 billing had to support and sure as hell it does.

What's your figure then for the Chancellor's take out of a £100 billing inc VAT. Including the secondary pension/taxation issues.

I'm not an accountant, I don't have access to tax tables, wages software and all that. I have to pay the accountant to do our salaries calculation. His fee (we get a seperate fee for doing the wages) should be on that list *as well*.

DG

Don't have any. I don't care enough to work them out.

That you've got at least a 10% error in there, and you're double counting on other stuff (eg VAT, pensions).

I'm not an accountant, and I do. Well, I'd write my own wages software if Excel didn't suffice. Do you have access to the web, or just news? If you've got web access, you've got access to the tax tables.

clive

Sorry , it shouldn't be taken as a "count" but as an "item list". I know these charges are applied in a sequence (but I don't know the rules) . But there is enough in the list to support a claim that the chancellor's take out of a 100 quid vat inclusive billing is about 80 quid.

I probably wouldn't understand them, & I'd look well paying my accountant to employ a wages clerk to do our PAYE, but then poring over web pages for the sake of a usenet post. Anyway, they might not demonstrate explicitly what I'm after, which is the the marginal tax take on £100 of marginal extra billings once into higher level tax,

Let alone that after 2 taxation cycles (remember Dave ?) when nearly all the billing has gone in tax. You dispute 80%, I'd dispute it wasn't well over 70%.... Anyhow...

Billing out £100.

If it's 80% after 2 tax cycles 4% is left for the taxpayer to spend

If it's 70% after 2 tax cycles 9% is left for the taxpayer to spend.

Woo-Hoo !

But lets not go mad, whatever he spends it on it will prolly attract VAT, reducing his spend by 14.9%, If it's booze or road fuel excise duty will have been charged beforehand reducing it by another 60% or so *as well as* the 14.9% VAT.

There's absolutely no doubt about it. The Chancellor's the one doing the "double counting" here.

DG

Er, no, you are. Even with a 10% tax rate, after a few cycles using your logic there's very little left for the taxpayer to spend. Which illustrates there's something wrong with the way you're working things out. (Which is that you forget that money comes out of the govt in the form of salaries, purchases, etc, thus feeding everything from the top again.)

You're definitely double-counting the VAT - eg the 17.5% you're charging your clients you're also counting as part of their personal tax count. The business fuel VAT is zero. The pension stuff is a few % of a few %. Since you chose for simplicity to only consider higher tax rate payers, you only have 1% employee NI to consider.

Other people have done the sums properly, and it comes out as about 42% - have a look for "Tax Freedom Day".

clive

Derek ^ ( snipped-for-privacy@miniac.demon.co.uk) gurgled happily, sounding much like they were saying :

FFS, man - you need a half-decent accountant. Pay yourself a low salary and take more as dividends on the profit.

Double-count. You already claimed the vat back on expenditure.

Do you increment your pension payments in line with your earnings? How's that money go to Gordon? Pension payments are counted from untaxed income, anyway.

??? - Anyway, how does that increase with your extra earnings?

SERPS was discontinued years ago.

ITYM "wet-finger-in-air guesstimate"...

Don't be ridiculous.

Oooooh. 5% on insurance premiums. How many extra insurance premiums are you taking out for your couple of hundred quid extra work?

The only things that affect your portion of the extra money are :-

VAT. NI. Income Tax.

Look, it's simple - if you don't like the costs of being in business, work for somebody else. Or stop whining and get on with it.