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Re:Ken Clarke, who I always thought was a great Chancellor... 15 Years, 5 Months ago
Cutting VAT is both instant, and potentially costs nothing. As the tax revenue generated by the increase in spending compensates for the reduction in the rate.
Re:Ken Clarke, who I always thought was a great Chancellor... 15 Years, 5 Months ago
I'm not sure if cutting VAT would be any quicker a process than reducing income tax, both would take time to implement.
From a business point of view in the quarterly VAT returns I will have some VAT I've paid at the old rate to claim back, some at the new rate. Obviously I'd have charged VAT at the old and new rate too.
Some I will have paid at the old rate and collected at the new rate
For me my VAT is quite straight forwards but I can see for some it will be a bureaucratic nightmare and will add to business running costs to sort it all out.
So if VAT is more instant than income tax cuts I haver no idea, not sure why it would or would not be, but it certainly isn't cost free.