Vat to increase to 23%

North Cork

Motoring costs are going to rise as vat is going to be increased according to the report below so expect jumps in petrol and diesel, also purchasing a car will will be more expensive as the vat rate on cars is 21%

http://www.rte.ie/news/2011/1117/budget.html

Documents obtained by Reuters show the Government will increase the top rate of VAT by 2% in next month's Budget and make up the rest of the €1bn it is targeting in new revenue measures through indirect taxes.
Ireland is committed to making budgetary adjustments of €3.8bn for next year under its EU/IMF bailout and Minister for Finance Michael Noonan has said he will not reveal the exact measures until he presents the budget on 6 December.

However, according to a document presented to the budget committee of the German lower house of parliament yesterday, Ireland will raise the top rate of VAT to 23%, generating an additional €670m.
"After successive budgets in which income tax burdens were raised significantly, we have decided to focus on indirect tax increases to deliver the bulk of the €1bn additional tax effort required in 2012," the document said.

"To this end, the VAT rate is being raised by 2 percentage points to 23%, which will generate €0.67bn."

In a separate document, the EU-IMF-ECB troika of lenders said that while Ireland continues to perform well under its programme, risks remain for market sentiment, economic growth and potential higher-than-anticipated bank losses.

Minister for Public Expenditure and Reform Brendan Howlin told RTÉ's News at One that no decision had been taken in relation an increase in VAT.
"There are no budgetary decisions made by Government yet," said Mr Howlin.

"The Budget is a work in progress, and I'm certainly not going to going to discuss any potential elements of it, but I can tell you there are no decisions in relation to any element of the Budget, and there won't be until the entire package is before Cabinet.

"The issue (the VAT increase) is part of the Memorandum of Understanding - the timing might be somewhat different, but I've no idea the basis of discussions in the German Bundestag."


Fianna Fáil finance spokesperson Michael McGrath said Mr Noonan needed to urgently make a statement on the reports that details of Ireland's budget plans for 2012 were revealed to the German parliament.
"According to the reports, members of the German parliament have been given details of the Irish budget three weeks before the Irish parliament and the Irish people," Mr McGrath said in a statement.

"If this proves to be true, it would be a staggering and unprecedented breach of faith with the Irish parliament and Irish people on budget plans. It would represent a fundamental breach of established protocols in relation to the disclosure of budgetary measures.

"We need to know whether the Irish government has revealed the detail of its budget plans to the German budget committee.

"In addition to the reported planned VAT increase, what other information has been given the German authorities about the budget plans?"

Zubeneschamali

Old news, 23% VAT was part of the memorandum signed by the previous Government with the troika to get the bailout.

[Edit: and FF have got a brass neck like C3PO's to be asking questions like this when they signed that feckin memorandum in the first place]

listermint

YAY tax our way out of this,

Has this ever been successfully done.... ever ???


Ever?

bryaner

listermint wrote: »

YAY tax our way out of this,

Has this ever been successfully done.... ever ???


Ever?

Only ever worked in one place before................. a place called numpty land where everyone was just happy being numpty's..

Atomic Pineapple

Is the extra €670m it is expected to bring in based on current spending trends or have they adjusted it to take into account that people will likely spend less if things cost more?

Guy:Incognito

We could all signed a petition to promise to spend 30% more on goods if they abolish vat altogether :-)

MugMugs

The day of me filling up North could soon be here. And I.bloody well will too.

Gophur

I was buying a "item" today for €40. When I presented my credit card the guy behind the counter said "I'll have to charge VAT!".

Card back in wallet and cash changed hands instead.

A VAT rate of 23% is a retrograde step but yet another item, signed up to by the last administration, the current administration will slavishly follow. College fees is another one.

barura

Yes, lets all go out to the petrol stations to fill up our cars to save pennies the night before as well!

Raskolnikov

MugMugs wrote: »

The day of me filling up North could soon be here. And I.bloody well will too.

Diesel is about 15% more expensive there, petrol about 5% more expensive, so not worth your while.

Guy:Incognito

Gophur wrote: »

I was buying a "item" today for €40. When I presented my credit card the guy behind the counter said "I'll have to charge VAT!".

Card back in wallet and cash changed hands instead.
.

Were you buying drugs with your credit card?:)

whippet

Zubeneschamali wrote: »

Old news, 23% VAT was part of the memorandum signed by the previous Government with the troika to get the bailout.

[Edit: and FF have got a brass neck like C3PO's to be asking questions like this when they signed that feckin memorandum in the first place]

FF's were going to implement this over 2013 & 2014 not in one single swoop.

a 2% hike on the top rate of vat in a single day will have a massive impact on consumer spending. Think about it, it is in effect a 2% levy on your disposable income.

Atomic Pineapple

whippet wrote: »

FF's were going to implement this over 2013 & 2014 not in one single swoop.

a 2% hike on the top rate of vat in a single day will have a massive impact on consumer spending. Think about it, it is in effect a 2% levy on your disposable income.

Exactly, its crazy, why not decrease it a little to encourage people to spend more like the UK did for a year and was quite successful I believe?

Bullseye1

All its going to do is increase trade in the black market. It's madness.

TestTransmission

draffodx wrote: »

Exactly, its crazy, why not decrease it a little to encourage people to spend more like the UK did for a year and was quite successful I believe?

They raised it here before sure didn't they and then they dropped it back down a year ago i think?

GavMan

draffodx wrote: »

Exactly, its crazy, why not decrease it a little to encourage people to spend more like the UK did for a year and was quite successful I believe?

Tried doing that with the lower rate of VAT but retailers for the most part haven't past it on. Certainly not in the places I've eaten, for example.

Atlantic Dawn

Motor tax was due to go up 5% in Fine Gaels programme for government, I'd think they won't have any problem sticking to this promise.

coylemj

whippet wrote: »

a 2% hike on the top rate of vat in a single day will have a massive impact on consumer spending. Think about it, it is in effect a 2% levy on your disposable income.

VAT is currently 21% so if it goes up to 23% it means that an item currently costing €121 will increase to €123 which is an increase of 1.65%, not 2%.

Allowing for the fact that most food is exempt from VAT, the levy on your disposable income will be closer to 1% and chances are that a lot of retailers will absorb the increase for fear of losing business. Most products where consumers are price-sensitive such as milk and bread are already exempt from VAT so retailers such as restaurants and clothes shops will have to make a commercial decision as to whether they will pass on the increase or absorb it.

Charlie McCreevey reduced VAT from 21% to 20% for the year 2001 and retailers didn't pass on the reduction so he put it back up in the following budget.

NewApproach

draffodx wrote: »

Is the extra €670m it is expected to bring in based on current spending trends or have they adjusted it to take into account that people will likely spend less if things cost more?

I'd say it's safe to say they have, yes. It the most basic rule of economics; the people who decide the budget aren't that stupid.

Saab Ed

We hope to have anywhere between 60-80 pre sold cars for January this year in our dealership. Problem is A) when it does go up I just cant see us getting the extra 2% of people who've already done deals so its gonna cost us a small fortune and its just going to further hammer our business. i'm gonna be doing a lot of work for little take. Sick to hell with this place. If I wasn't too long settled down I'd be off. Oh to be 20 something with a degree in something usefull. There isn't a hope in hell I'm gonna let my kids waste their life saying in this sh!te hole that's for sure.

vicwatson

The worrying part is that we are giving this information to Germany, what the hell?

Edit - sorry only realised this was the motors forum. Suppose point still stands

Saab Ed

NewApproach wrote: »

the people who decide the budget aren't that stupid.

I'm on the floor in laughter here. They haven'y got a bogs,sure they're the idiots who lost nearly 4 billion euro FOUR F&%KING BILLION. You're havin a hat and scarf aint ya!!!!

Grass is always greener etc etc, I know quite a few folk working abroad on decent cash and a lot of them would love to be home with the head above water even just about.

Saab Ed

RoverJames wrote: »

Grass is always greener etc etc, I know quite a few folk working abroad on decent cash and a lot of them would love to be home with the head above water even just about.

I know where you're going with that and you're right , the grass is always greener.....but atleast they have f&^kin grass

True true, things are grim enough here. I do think we are a pessimistic lot though, every tide turns and all that, this one might well take a while to turn and our pockets will get lighter but anyone keeping body and soul together will manage away I think. In saying that tis good to vent

Sobanek

Oh well, another reason for me to move to Canada.

MugMugs

Raskolnikov wrote: »

MugMugs wrote: »

The day of me filling up North could soon be here. And I.bloody well will too.

Diesel is about 15% more expensive there, petrol about 5% more expensive, so not worth your while.

You've no idea how much they're going to lay onto fuel.

Gophur

Saab Ed wrote: »

NewApproach wrote: »

the people who decide the budget aren't that stupid.

I'm on the floor in laughter here. They haven'y got a bogs,sure they're the idiots who lost nearly 4 billion euro FOUR F&%KING BILLION. You're havin a hat and scarf aint ya!!!!

Nobody 'lost' nearly €4b.
A little bit over dramatic, eh?

EPM

Gophur wrote: »

Nobody 'lost' nearly €4b.
A little bit over dramatic, eh?

We found it again down the back of the couch though:D

Voodoomelon

A €1.50 litre of petrol will cost €1.524 after the hike. A 1.6% rise.

Plus whatever tax they increase on fuel, plus increased motor tax, plus increased insurance no doubt.

Eleganza

carbon tax is due to go up again.
vat gets applied after carbon tax.

Chuck_Norris

Lads, we know we're gonna be screwed, just not by how much.

And maybe it's just the cynic in me to think this is a political ploy. A "secret" release of information that VAT is to increase by 2%, yet on budget day it will be declared that it's "only" a 1% increase this year, thereby keeping the people's happy. :rolleyes:

bazz26

These might become a common sight on our roads the way things are going:

amacachi

draffodx wrote: »

Exactly, its crazy, why not decrease it a little to encourage people to spend more like the UK did for a year and was quite successful I believe?

It really wasn't successful, hence why they put it straight back up and then up further.

Atlantic Dawn

We are also facing the 2% Quinn tax on our insurance polices too, I love keeping their 1600 jobs in place at a cost of €500,000 per employee, bargain .

http://www.anglocelt.ie/news/courtreports/articles/2011/10/07/4007002-court-approves-738m-from-fund-for-quinn-insurance-/print

dr.fuzzenstein

draffodx wrote: »

Is the extra €670m it is expected to bring in based on current spending trends or have they adjusted it to take into account that people will likely spend less if things cost more?

I don't think they thought that far.
Step 1: Collect underpants...

galwaytt

coylemj wrote: »

whippet wrote: »

a 2% hike on the top rate of vat in a single day will have a massive impact on consumer spending. Think about it, it is in effect a 2% levy on your disposable income.

VAT is currently 21% so if it goes up to 23% it means that an item currently costing €121 will increase to €123 which is an increase of 1.65%, not 2%.

Allowing for the fact that most food is exempt from VAT, the levy on your disposable income will be closer to 1% and chances are that a lot of retailers will absorb the increase for fear of losing business. Most products where consumers are price-sensitive such as milk and bread are already exempt from VAT so retailers such as restaurants and clothes shops will have to make a commercial decision as to whether they will pass on the increase or absorb it.

Charlie McCreevey reduced VAT from 21% to 20% for the year 2001 and retailers didn't pass on the reduction so he put it back up in the following budget.

Well, unless you have access to Star Treks Transporter Beam, for moving goods to market, and INCLUDES food, you're wrong. Artics run on diesel, at about 4mpg, and with increase carbon tax, road tax, VAT, then ALL goods WILL go up.

FG admitted that reducing VAT to 9% increased tourism business. So, increasingly it for other services is going to do the opposite? FFS...morons.

Jimmy Bottles

galwaytt wrote: »

Well, unless you have access to Star Treks Transporter Beam, for moving goods to market, and INCLUDES food, you're wrong. Artics run on diesel, at about 4mpg, and with increase carbon tax, road tax, VAT, then ALL goods WILL go up.

FG admitted that reducing VAT to 9% increased tourism business. So, increasingly it for other services is going to do the opposite? FFS...morons.

The cost of moving goods in articulated lorries will not go up as long as the person moving the goods is VAT registered.

If Tesco move goods from depot to shop, it can claimed back the 23% VAT on the diesel used.


Depending on how competitive the sector is, some suppliers may decided to take a hit on their margin to soak up some of the increase.

In fairness to FG their hands are tied to an extent, the morons were their predecessors and to a huge degree the financial regulator. They are also no doubt aware of the effect any increase in diesel will have, the end effect is the same though, less disposable income for everyone, done by increased income tax or VAT increases, in the big picture it matters little and the end effect is the same. Shrinking economic activity is conceptually inevitable. We as a country are getting by on credit, we have to play along while we can, something will give eventually because there are worse messes than the Irish economy, fingers crossed it won't be us. THere is plenty of cash out there to save the euro, the time for It to be called on isn't too far away me thinks.

Jimmy Bottles

Jimmy Bottles wrote: »

The cost of moving goods in articulated lorries will not go up as long as the person moving the goods is VAT registered.

If Tesco move goods from depot to shop, it can claimed back the 23% VAT on the diesel used.


Depending on how competitive the sector is, some suppliers may decided to take a hit on their margin to soak up some of the increase.

True with VAT, not with other increase such as carbon tax.

Saab Ed

RoverJames wrote: »

In fairness to FG their hands are tied .

Not the forum for it but now that you've brough it up, their hands were tied is dead right. Their f&%king gobs weren't tied though when they promised everything that they knew they couldn't deliver in the run up to the election. They promised no new taxes, no college fees , no closure of A&Es that have already been closed. Sorry but me hole, they knew full well they were talking sh!te and were shamless in doing so. Bigger whores than FF ever where ( Just to set the record straight I bloody hate all things FF )

Anyway, as far as my industry goes it seems FG dont know their arse from their elbow as to what has to be done to sustain jobs in this sector nevermind create more. This VAT rise will just put more of us out of work as it will in many other industries. Bad day.

That's what politicians do though. 40 odd per cent of 3rd level students get grants. If fees come in that proportion of students won't be hit, I'm not overly bothered about those who can afford them being charged them, there will be a band of folk hit though and that's a shame and a broken promise no doubt. twas labour came oout with that anyway not FG. At least a VAT increase is universal. OF course less well off folk will notice it more. Sure the m
Muck SF and FF were spouting pre election wasn't remotely plausible.
Job losses in any industry are bad, look to FF and the financial regulator for root cause though, the bubble burst. VAT increase will compound that but so too would increased income tax, not as direct though.

Tragedy

RoverJames wrote: »

That's what politicians do though. 40 odd per cent of 3rd level students get grants. If fees come in that proportion of students won't be hit, I'm not overly bothered about those who can afford them being charged them, there will be a band of folk hit though and that's a shame and a broken promise no doubt. twas labour came oout with that anyway not FG. At least a VAT increase is universal. OF course less well off folk will notice it more. Sure the m
Muck SF and FF were spouting pre election wasn't remotely plausible.
Job losses in any industry are bad, look to FF and the financial regulator for root cause though, the bubble burst. VAT increase will compound that but so too would increased income tax, not as direct though.

Because FG or Labour would have done much better?

Personally, I prefer direct tax increases to indirect tax increases however, with consumer spending still absolutely dire and warnings all around that we can't rely on exports to be the sole engine for economic growth - why the hell are they saving most of the money through increased taxes rather than cutting expenditure? Absolutely ludicrous, and it's going to have disastrous consequences.

I think we wouldn't have had as much as a boom if FG and labour were in power, I think we would have had less money to play with, which is why FF weren't ousted 8 years ago. To drastically cut expenditure the CP agreement would need to be bined. I don't think the appetite exists for that at the moment. The greens motor tax scheme has been far from revenue neutral I would suspect. That will worsen too as the years go on and they'll have to recoup the deficit through taxation on fuel I expect, vicious circle as the economic situation we are in dictates that a reward for running a low c02 car must be paid by someone. The one benefit of indirect taxation is that folks can fool themselves into thinking they aren't paying it as much, perhaps that's not a benefit but the likes of the universal social charge went down like a lead balloon.

Mr Simpson

RoverJames wrote: »

That's what politicians do though. 40 odd per cent of 3rd level students get grants. If fees come in that proportion of students won't be hit, I'm not overly bothered about those who can afford them being charged them.

Completely OT but f**k that, I'll give you an example. My two grandmothers and my mother died in the last year. This has left my Dad with two additional houses that he basically can't give away at this stage, is making a loss renting them and has to pay capital gains tax on them. If fees come in, he will have to pay fees for my brother as his income is deemed "too high". The grant system is f****d up as it doesnt allow you to deduct those sort of expenses from your income!!!!! /Completely OT rant over!!!!

mmcn90

mmcn90 wrote: »

Completely OT but f**k that, I'll give you an example. My two grandmothers and my mother died in the last year. This has left my Dad with two additional houses that he basically can't give away at this stage, is making a loss renting them and has to pay capital gains tax on them. If fees come in, he will have to pay fees for my brother as his income is deemed "too high". The grant system is f****d up as it doesnt allow you to deduct those sort of expenses from your income!!!!! /Completely OT rant over!!!!

SOrry to hear about your losses.
I don't see how if is making a loss renting out two properties that he has inherited to be honest as presumably they are not mortgaged. Capitol gains tax isn't charged on rental income so I don't know what you are on about there. Income tax is, on the difference between the rental income and the expenses incurred. If he is paying income tax on rented out properties that he inherited I can't see how he is making a loss.
As the houses were inherited selling them was most definitely an option, perhaps he reckoned renting them out was a better move.

What motor tax does he pay btw, poor effort at staying on motors related chat.

samsemtex

Sobanek wrote: »

Oh well, another reason for me to move to Canada.

Pffft, i live in Canada and believe me you will not earn much money here. Unless you have a good job in something you are qulified in lined up before you leave i wouldnt bother. I know tradesmen working in Vancouver earning about $15 an hour. On a motors related issue petrol is pretty expensive here. A lot cheaper than home but its still over a euro a litre. Feck it, everything is expensive here. the canadian dollar is worth about the same as the US dollar but stuff costs on average 20-30% more.

Sorry for the OT.

Soarer

mmcn90 wrote: »

Completely OT but f**k that, I'll give you an example. My two grandmothers and my mother died in the last year. This has left my Dad with two additional houses that he basically can't give away at this stage, is making a loss renting them and has to pay capital gains tax on them. If fees come in, he will have to pay fees for my brother as his income is deemed "too high". The grant system is f****d up as it doesnt allow you to deduct those sort of expenses from your income!!!!! /Completely OT rant over!!!!

Jaysus, that's a bad year. Sorry to hear about your losses.

As for your dad's position, I'd get a good accountant.

Elessar

I'm 95% sure I'm buying a new car in the new year, but another 2% increase might make it just too expensive for me as I've tightly budgeted for it...More money lost to the exchequer.

On a good note, at least the documents said that they will be reforming the motor tax base in 2013 and not 2012.

Cookie_Monster

Elessar wrote: »

On a good note, at least the documents said that they will be reforming the motor tax base in 2013 and not 2012.

doesn't mean they won't be increasing it in the meantime unfortunately.

who_ru

petrol drivers are subsidising diesel drivers at the moment, a modern diesel 1.6ltr engine costs 104 euros a year on road tax, a 5 year old petrol motor with 1.6ltr engine costs 450 euro per year to tax.

that is a crazy situation and must be changed.