"no Fedex Please"

[McClef]

Given the UK's experience with VAT, I would be interested in hearing what you on the eastern side of the Atlantic think. Would abolishing VAT be popular there? What kinds of taxation could replace it?

One of the arguments against a national sales tax is that it is unreliable, and the amount it brings in would vary quite a bit from year to year. Is this the case with VAT?

I used to have to do VAT returns every quarter (this is the normal frequency) when I was the National Treasurer of the Motorcycle Action Group. Businesses that have a turnover above a certain figure have to register for it which has advantages and disadvantages. VAT is charged on all the various parts of a process or service and the VAT paid can then be reclaimed by the trader with the full amount being paid by the end user. It can be a lot of paperwork, especially as there are three official rates here here in the UK depending upon the item.

Some items are zero rated, domestic energy is 8% and the main rate is 17.5% so depending upon the mix it is actually possible for a trader to end up getting a VAT refund as opposed to having to pay money to the revenue if there are considerable zero rated transactions. It is up to each EC country to set their own rates within certain guidelines. Even some non-EC countries such as Norway use a similar system known as MOMS.

VAT replaced previous systems such as Purchase Tax and its abolition would only be popular if whatever replaced it was more advantageous to the end user rather than a Government but as we all know this is rarely the case!

I take both your points, Trefor.........




......... and I am with you on that! I have already made up my mind who I will ask to make mine up - assuming our good friend can lay his hands on the tartan for us - and, Trefor, it is unlikely to be the kiltmaker you might expect me to use. More than that I am not saying!!

Take care,
Ham.

Oh dear Hamish! Howie will be disappointed!