UK question: VAT increase implications?

[spanner14]

Morning all, hope your day is going well.

 

My DH just raised an interesting question which hopefully someone will be able to help me with - I believe the UK VAT is due to increase to 20% in January. The balance of our next cruise (in Aug 2011) is due in May '11. Will the VAT increase mean that the balance of the cruise is higher, or as I booked it this summer, while the VAT was still 17.5%, will the balance stay the same?

 

Hopefully someone can help - I don't think I have the heart to be on hold with RCI for ages on a rainy Monday.

 

Thanks :)

[Greghouseo]

Not sure what element of your cruise is VATABLE.

 

Look at your invoice. If there is a VAT breakdown to the element of VAT you are paying, but I don't think there is an element of your holiday that has VAT applicable.

[Jetdriver787]

The VAT rate is that applicable at the "tax point" that is when the invoice is raised for the goods or services. If you pay a deposit that will normally create two tax points, one when the invoice is raised for the deposit (at the old rate) and one when the invoice for the balance is raised (at the new rate.)

 

Of course these are the rates that the supplier has to use in the submission of their returns to Revenue & Customs (HMRC), whether they pass this on to you is up to them, although in all likelyhood they would.

 

Advance payments and deposits

 

An advance payment, or deposit, is a proportion of the total selling price that a customer pays before you supply them with goods or services. If you ask for an advance payment, the tax point is whichever of the following happens first:

 

the date you issue a VAT invoice for the advance payment

the date you receive the advance payment

You include the VAT on the advance payment on the VAT Return for the period when the tax point occurs.

 

If the customer pays you the remaining balance before the goods are delivered or the services are performed, another tax point is created when whichever of the following happens first:

 

you issue a VAT invoice for the balance

you receive payment of the balance

So you include the VAT on the balance on the return for the period when the tax point occurs.

[vermontcruisers]

20% TAX!!!! That is EXTORTION by the govt.We may get that here in the US since we will ultimately have to pay for Obamacare.

[galavant3]

20% TAX!!!! That is EXTORTION by the govt.We may get that here in the US since we will ultimately have to pay for Obamacare.

 

I could be wrong but I don't think they pay federal income tax. If that is the case, I would prefer the 20% :)

[Albert Ross]

Morning all, hope your day is going well.

 

My DH just raised an interesting question which hopefully someone will be able to help me with - I believe the UK VAT is due to increase to 20% in January. The balance of our next cruise (in Aug 2011) is due in May '11. Will the VAT increase mean that the balance of the cruise is higher, or as I booked it this summer, while the VAT was still 17.5%, will the balance stay the same?

 

Hopefully someone can help - I don't think I have the heart to be on hold with RCI for ages on a rainy Monday.

 

Thanks :)

There is no VAT on cruises. There will be no change to your costs.

I assume that if you wanted flights then the cost of these will go up if you

book next year though. If you booked your cruise/flight package already the cost will be fixed and not increase.

[kernow]

I could be wrong but I don't think they pay federal income tax. If that is the case, I would prefer the 20% :)

 

Unfortunately we very definitely do have to pay income tax as well. VAT is just a sales tax.

 

Julie

[vermontcruisers]

I could be wrong but I don't think they pay federal income tax. If that is the case, I would prefer the 20% :)

 

I believe VAT/GST is a Goods and Services tax.It applies to almost everything.They have it in Canada.It makes it very hard to get ahead when the gov't takes so much.

[galavant3]

I believe VAT/GST is a Goods and Services tax.It applies to almost everything.They have it in Canada.It makes it very hard to get ahead when the gov't takes so much.

 

Yes, I realize that...but do they also pay federal income tax? I would prefer the 20% if that is the case. We pay federal income tax, sales tax, property tax and some pay state income tax.

 

Not complaining but the 20% would seem like a bargain :)

[Elizanessie]

There is no VAT on cruises. There will be no change to your costs.

I assume that if you wanted flights then the cost of these will go up if you

book next year though. If you booked your cruise/flight package already the cost will be fixed and not increase.

 

Thank you Albert for confirming this :D Much appreciated.

[pspercy]

Yes, I realize that...but do they also pay federal income tax?

 

They most certainly do, UK income tax top rate is now 50% not to mention council tax(property tax) etc. Total tax burden in Europe is generally well in excess of 60%. I could post a table but I won't as this isn't the place.

 

As for VAT, the Feds can't wait to do it here too.

 

Anyway, enough of that.

[galavant3]

Yes, I realize that...but do they also pay federal income tax?

 

They most certainly do, UK income tax top rate is now 50% not to mention council tax(property tax) etc. Total tax burden in Europe is generally well in excess of 60%. I could post a table but I won't as this isn't the place.

 

As for VAT, the Feds can't wait to do it here too.

 

Anyway, enough of that.

 

Thank you for the education :)

[louthebowler]

with all the taxes and vat we pay over here, maybe people might realise why we moan about the 15% extra we have to pay when we get on board, there is just no escaping the extra payments in life!

[Barnaby100]

And now we lose child benefit£ 1400 a year or £25,000 for a family with 2 children over 18 years.

 

Tax tax tax..........

 

You lucky Americans don't know how good you have it!

[UKBayern]

It makes it very hard to get ahead when the gov't takes so much.

 

A lot of the system in Europe is bases on solidarity. Social security in Western Europe (especially Scandinavia, Netherlands, Germany, etc) is the best in the world. We all have proper health coverage, all kids have equal schooling chances, nobody has to work 3 jobs to basically feed his family. The EU is also the biggest provider of development aid to the Third World.

 

VAT is instead of state tax. We only have prices in the stores including all taxes, it is not allowed any other way in Europe. We sometimes get caught thinking that something is cheap in US shops until we take out our wallet...

[spanner14]

Thank you Albert for confirming this :D Much appreciated.

 

Absolutely, and thank you from me too! That's good to know. We're not flying as we're cruising from Southampton so - phew - looks like the VAT increase will not affect the balance. :)

 

Thanks so much for that - I feel better now! Interesting thread about tax too!

[peteukmcr]

There is no VAT on cruises. There will be no change to your costs.

I assume that if you wanted flights then the cost of these will go up if you

book next year though. If you booked your cruise/flight package already the cost will be fixed and not increase.

Many thanks for the info, very much appreciated.

[markuk]

Great thread, off to bed now and have bloody nightmares about tax's:(

[spanner14]

Great thread, off to bed now and have bloody nightmares about tax's:(

 

Sorry! I feel bad now for starting the thread!

 

Still good to know about the VAT :)

[Greghouseo]

And now we lose child benefit£ 1400 a year or £25,000 for a family with 2 children over 18 years.

 

Tax tax tax..........

 

You lucky Americans don't know how good you have it!

 

Yes but only if you earn £44000+ per annum

[pspercy]

We sometimes get caught thinking that something is cheap in US shops until we take out our wallet...

 

Seems to me that if something costs a dollar in the US it costs a pound in the UK. The UK consumer is generally very poorly served (ripped off might be a better way of putting it for many things). What's amazing is Aussies saying shopping in Hawaii is cheaper for them!