The Telegraph leads with a story today on the EU's proposed reduction from next year of the EU-wide maximum VAT threshold from £85,000 (€95,000) to £76,700 (€85,000). The UK uses the maximum, and has the highest VAT registration threshold in Europe (good for small service businesses). The paper is correct in identifying two effects; first, that under the Robbins Treaty, all firms in the UK will have to comply for the next two years, and second that under the backstop arrangements, the requirement could be permanent in Northern Ireland. Not only would thousands of UK businesses now trading just under the VAT threshold be caught in an onerous EU net, but the change would cause irrevocable harm to Northern Ireland.
Imagine a situation under May's treaty if, in two years, without a trade agreement having been concluded, the UK decided to abolish VAT. Although we would be free to do so in England, Scotland and Wales, all shops, supermarkets, pubs, trains and aircraft and all other businesses selling in Northern Ireland would still have to charge VAT.
The paper doesn't mention VAT competition between the UK and Ireland. Most VAT thresholds in Europe are substantially lower (Belgium €25k, Germany €17.5k, Lux €30k, NL - nil) but two nations closest to Britain have had to carry split high thresholds - Ireland with €75k for goods and €37.5k for services, and France with €82.8k for goods and €33.2k for services.
Without a UK veto, the EU can progressively decrease the threshold in Northern Ireland down to about half its current level, allowing the Irish government to increase its tax-take. May's agreement would prevent Northern Irish businesses from taking advantage of any reductions in VAT rate or increase in thresholds in mainland Britain after Brexit.
Just another trap set by the EU and willingly incorporated by May's muppets in Team Robbins.
However, it would all go to buggery if we left without a deal in March. We could then abolish VAT if we wished across the whole of Britain - including Northern Ireland. The DUP would have to be literally insane to move even a millimetre in placating May's government on the Robbins treaty.
6 comments:
Just the start of the tax harmonisation by the Empire-to-be. They'll be coming for Corp Tax before long.
If the country and ALL of its people really wish to prosper, we should do away with team Robbins, which is after all merely a Brussels branch office.
As I commented yesterday, Cowperthwaite thought that the only necessary social service was a roof and door for every citizen... Nuthin' fancy, but somewhere to keep your stuff. Everything else should be earned, and the threshold is much much lower, 15% tax/excise take overall, makes it much easier for the JAMS as well as the Whizzkids. If everybody operates within the same system and recognises that there is no point hating one group or the other, like the rich, or those of different faith or colour, and we spend that 15% on ensuring that everyone has a roof, and that everyone's property rights are maintained, we will attain Hong Kong like prosperity. i.e. From rags to riches in less than twenty years.
All the queues, all the overcrowding, all the nastiness, just withers on the vine.
The Robbins type are a pestilence.
Vat is the worst tax, and the main reason why I voted leave
Sack the Senior Civil Service en masse without compo and with their pensions confiscated. They are traitors, middle/upper class Marxists( in practice even if they don't pay lip service to the creed openly) and arabist beard-suckers.
The UK's circs would be massively improved with a pack of brazen traitors removed.
@right-writes
You could argue that the difference between government taking 15% and the current tax burden of around 34% is the drag on the economy of Robbins and the like.
All those expensive houses in London driven by the 'wages' of the Quangocrats, technocrates and BBC producers/newsreaders is funded by the poor in shite parts of the rest of the country.
How true it is that they would be much better being in control of that money and choosing how to spend it themselves instead of being denied cheap food because some prodnose decided it had too many calories.
@Matt:
I largely agree with your riposte, but I reckon that the overall tax burden is closer to 80% than your 34%. Adam Smith Institute certainly calculated that burden in the mid 70's ten years ago, the last time I looked.
If you are poor, you are burdened with very high taxes on the essentials, which are taxed at source. It's what Rees-Mogg is waffling on about when he talks about cheaper clothes, food and footwear.
As you move up the scale the burden shifts somewhat, i.e. you pay more in taxes on your earnings than on your purchases... clever people are able to manipulate that somewhat, it is still far too high though.
If you are very rich, say a corporate entity, like Amazon, or Apple, you move and shift your money around the globe and avoid quite a bit of responsibility, the only beneficiaries though are the corporations' owners and major shareholders... the employees are shafted like the rest of us.
We shouldn't be paying for stuff we don't want... I never watch the BBC and I resent paying for a bunch of lefties to dictate to me... Even though I do not "consume" their scurrilous output, I still have to pay, just to have a screen in my house.
The point about Cowpertwaite is that NOBODY has to be worried about where to lay their head at night, or where to keep their possessions secure... However nobody wants to stay in those conditions and unless you are totally incapable for some reason, you go out and up. Whether you live on fizzy drinks is neither here nor there.
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