Late last night I turned on the English TV in time to catch the inevitable whinge about the budget. There is always a whinge; the only matter of note is who is doing the whinging.
This time it was an announcer in expensive cashmere pashmina artfully draped over an equally expensive raincoat. British summer time at its best. She was whinging on behalf of ‘the poorest in society’ who were going to be ‘hardest hit’ by the increase in Vat – and she was holding aloft – amongst other items, a DVD to illustrate how the price would rise.
Perhaps the poorest in society do buy DVDs these days. Maybe that is the norm. In which case it illustrates how ridiculous the ‘poverty gap’ really is.
Ask any pensioner – they will tell you that the State pension does not extend to DVDs or the essential players that go with them. They listen to the radio – music for free once you have bought the radio. Whilst you are chatting to them, ask for some other tips on perfectly legal tax avoidance, for our pensioners are a mine of information, they have been doing it for years.
Simply because they figured out, by necessity, not choice, that Vat was exactly what it said on the tin, a Value Added Tax – a tax on the luxury of someone else doing something for you before you took possession of the goods. The non-essential version of the goods.
Society has moved so far forward in the past 50 years that our interviewer could find a young man who said ‘shan’t be able to afford a sandwich at lunchtime any more, shall have to go without’ – and no one stepped forward to say ‘make one at home before you go to work, you don’t have to go to MacDonald’s for your lunch – pensioners don’t’.
Take a look at the shopping basket of your average pensioner. You won’t see blocks of luxury Vienetto ice cream, with its 17.5% Vat rate, shortly to be 20%. You won’t see laptop computers so that they can read the newspapers without stepping out to the newsagent.
You don’t have to go on a foreign holiday; you don’t have to buy an expensive suitcase to do so. Cosmetics, Hair dye, the hairdresser once a week, false nails to save growing your own, new clothes every time the fashions change – pensioners are above all this, and thus rarely pay Vat.
There is no Vat on basic food stuffs. There is no Vat on newspapers, and printed music to tap out a tune on an old piano, there is no Vat on a postage stamp to allow you to stay in touch with your fiends, you can even go on holiday with no Vat – hire a canal boat and go up river. Take a coach and go visit your friend. Come to that, there is no Vat on a caravan.
There is no Vat on medical services for your health. There is no Vat on goods and clothing sold in a charity shop. There is no Vat on a Bingo game.
Vat kicks in when you want to save time or effort. You want a machine to wash your clothes, a cook to put your dinner on a plate, a sandwich made by your local Pole.
Our pensioners come from an era that remembers how to make custard with an egg, that didn’t expect their potatoes to come ready chipped. They owned a Spong that minced the left overs from the Sunday joint to make a Shepherds Pie; they still have black and white televisions and no Sky – can you imagine? They grew up making their own clothes, they shared out baby clothes with their neighbours, they soaked their false teeth in Bicarbonate of Soda, come to that, they owned what was euphemistically known as a ‘set of rags’, washed and bleached each month, and thus avoided the much complained about modern ‘tax on femininity’ – or the 5% rate on sanitary wear.
If the ‘poorest in society’ are suffering from the new rate of Vat, they could do a lot worse than talk to their nearest pensioner, they would learn a lot. Pensioners are highly skilled Vat avoiders.
Those complaining about an increase in the tax on luxury might reflect on the fact that their real problem is that they have become too used to the sort of luxury that attracts Vat.
Vat in has been at 19.6% in France for years – and in our department, the average income per household is 10,000 euros – which doesn’t buy a lot of luxury.
SBML is the landlord of the Raccoon Arms. He lives North of Watford and has an eclictic range of interests from Science and Technology to Politics including Woodwork and Genealogy. His political viewpoint has evolved from being a student demonstrator to more liberal views and has now seen the light in Libertarianism.
{ 43 comments }
Anna! Where did you find that lovely picture of our Mr Thaddeus taking to the open road?
Gloria,
The ex-Mrs Thaddeus sent it to me – it was the last she ever saw of him!
I am smitten! Nothing moves me quite as much as the combination of an attractive man with a fast vehicle. I am eternally grateful to the ex-Mrs Thaddeus for this glorious vision!
(Actually, if I’m strictly truthful, a crane could move me quite as much but that only happens when I’m chubbily wedged somewhere and the fire-brigade has to attend, so we’ll gloss over that one….)
One is grateful for your return Ms Smudd, the last one heard of you was dressed up as Little Bo Peep, clutching a bottle of Lambrsuco and off to some party somewhere -and that was four or five days ago. Good party was it? Get arrested did we?
The Fashion Police were called almost as soon as I arrived, Anna. My flab-hugging, white nylon and pink gingham Pantomime Cowgirl Outfit was blamed for rattling the herd and I was summarily run outta town. I didn’t even get the chance to give my spirited rendition of “Three Wheels On My Wagon” before I was roped and hauled off through the tumbleweed to sit and reflect among the cacti.
There is a lovely line in Robert Harris’ novel, Imperium -”I am old, and the old can live on fresh air”. That should not be construed as my proposal that the elderly (too soon to be me!) should live on the breadline – merely that as one grows older, some material needs diminish, and one realises that the truest wealth is peace of mind
Gildas the Monk
About a dozen people in Lancashire used to administer purchase tax ; it involved relatively few businesses. V.A.T. employs virtually the whole of Southend-on-Sea and almost every business in the land has to handle it : an incredible waste of resources.
The fiscally most sound state in the American union is Delaware ; Delaware has no sales tax. (Also has a low rate of tax on corporate profits, which is why so many corporations are registered there.)
Despite all the above, organizations such as the O.E.C.D. and the I.M.F. insist on foisting V.A.T. upon any country in whose affairs they becoming involved. More unnecessary big government ; as the Americans say … go figure !
??
VAT has been around for ages. The Duke of Clarence was overcome by it in 1478.
Or maybe you meant VAT not vat?
“”young man who said
The telly news has long aped The Day Today and Brass Eye.
“You don
Pensioner consultants, that is a great idea Alan!
Can I apply for that job? There isn’t much I don’t know about not spending money.
I was going to write a list, but if there’s any chance of getting paid for it then I shall hang fire.
Putting off writing the list has saved paper and ink or graphite. Every little ‘elps.
Not really : just 4Kb. for a Notepad file.
??
Just wandered in off the net, not been here before, very sensible conversation, what a refreshing change.
Anyone got a good idea or a good link for enjoying lamb breast? (could be an inexpensive luxury I was told, but it didn’t come with instructions)
Try googling lamb breast Sainte Menehoud. If you use a slow-cooker (another money saver) for the first stage you get excellent lamb soup stock for freezing as well. I’m not a pensioner but I know good value food.
Anna, how can food be so dear in France when the farmers are subsidised so much via the CAP by English townies? I understand that Kiwi farmers get no subsidy yet NZ lamb is cheaper than English lamb.
Brian, see my response to Thadd above!
ou ci-dessous as they say en Waitrose. So, if average household income is Euros 10,000, tax is higher and food is more expensive, why aren’t les grenouilles on strike/carbequeuing every day instead of every other day? I’m sure the
Brian,
Income tax for a two person family doesn’t kick in until around 18,000 euros, add more children and it kicks in correspondingly later (we are taxed per family, rather than per individual) more than 50% of tax is raised through VAT – so there are a lot of people around who’s income is negligible – maybe as low as 1,000 or 2,000 a year, but who have a few acres and grow or raise their own food, don’t ‘renovate’ thier ‘beautiful stone houses’ as the Englsih are fond of saying, and merely exist – but in peace and happiness! They drive those 30 mile an hour cars that don’t need a licience or road tax, and have a healthy barter system with their neighbours. They produce their own wine, and round here their own tobbacco too.
The CAP payments, as in Britain, go mainly to the big farmers….
ahh the good old breast of lamb, when my kids were small, I’d chop it into slices, roast it with tatties, the kids believed they were lamb chops until their teens. Back then the butcher gave them away I saw one in Asda the other day
the telly!
oh gawd!
the uk tv reporting is pathetic……meaningless drivel churned out according to the manual……the funniest ‘items’ are whn they find the local vicar to blather on about the ‘community’ as if we are a nation of god fearing crofters living on rockall!
western society DEPENDS on consumerism!
it was the same in the 60′s when jagger/richards wrote ‘satisfaction’……
our children are assaulted daily by the media…buy this,buy that…….
if you haven’t got the latest gizmo then you are poor or scum…..(children can be very hurtful)
my mates kids go to private school.the mums turn up in
Leaving the sentimental stuff aside I was shocked by Polly Toynbee’s maligning of the budget because the VAT rise will “push the country back into recession”
Now if Georgie Osborne had slapped an extra 20% on goods that might make me think twice before spending but an extra
Ian, your comment presupposes that people’s time has no value. In my case, the five minutes extra I get in bed in the morning is worth the
It costs that if you go to Tesburys. If you go to Pret, you’re lucky to get change out of a fiver.
Very sad to hear that shopping is so dear in la belle France, though.
It’s a combination of factors here Thadd. One, VAT has been at 19.6% for a long time, two, ‘cotisations’ – the sort of combined pension and health apyments made for our superb health service are very high so staffing costs are high, and three, most important of all, they just don’t sell cheap shoddy food here. Eveything is of the highest quality. Your leg of lamb will be superb, probably the best you have ever had unless you are lucky enough to live on a Welsh Farm, but it will cost you around 27 euros – and don’t get me started on the price of Turkeys at Christmas!
Meal preparation time is valuable, communicate with the kids, teach them how to feed themselves, cheaply. It’s the bloody TV
And yet the Government want us to use our time sorting rubbish.
In a very, very general sense VAT taxes the thing that makes us more productive – the division of labour.
A Level Economics Paper Question (Multiple Choice) 2010:
You are new the Prime Minister of a G7 Nation. You now required to sort out your national debt near crisis, after the most severe recession since 1945 and in the face of a wider sovereign debt crisis. At the same time you must restructure the balance between public and private sector and deal with a looming pension and PFI shortfall. You are also embroiled in at least one nasty overseas war. Do you take advice from:
a The Self Proclaimed “Cross Bow Cannibal”
b David Icke, or
c Polly Toynbee
Note. In order to make this question compliant with Elf n Safety and also in accordance with the former government’s drive to raise educational standards by giving everyone an A grade, you will be given a hint. Answer a = 10 marks. Answer b = 15 points. Answer c gets you sectioned under the Mental Health Act.
Gildas the Monk
I used to know quite a lot about VAT, but most of the detail has faded, now that I have passed the 120 mark. But I can tell you this:
Years back, my local amateur drama club were putting on a play which required a coffin on stage. It needed to be substantial, so we went and purchased a proper one, rather than knock one up. VAT was charged on the sales price, and we queried it. They told us the rule was:
Coffins are exempt from VAT… unless for purposes of entertainment.
And that is why we need all those people working on this tax — to split finer and finer hairs on all things bought and sold.
“…..Vat was exactly what it said on the tin, a Value Added Tax”
I beg to differ.
If an item costs
VAT is not levied on ingredients for pizza.
VAT is not levied on a frozen pizza.
VAT is levied on a takeaway pizza.
The value added (as the Revenue sees it) comes in the cooking of the pizza. Before it is food. After it is a meal.
A plain biscuit (and biscuits with choc-chips in them) attracts no VAT while a chocolate covered biscuit does attract VAT. Unless it is a teacake which is actually a cake (and hence VAT free) even if it has a biscuit base.
Shortbread attracts no VAT. Chocolate covered shortbread has VAT on it. Millionaire’s shortbread which has caramel between the shortbread and chocolate does not have VAT on it.
VAT is a peculiar tax.
“…to stay in touch with your fiends…”
Ah, it’s those grudges of old that keep me going!!!
Two things.
1. VAT went down 2.5% to 15% as part of Gordie’s fiscal plan. It then went back up to 17.5% as the another part of Gordie’s fiscal plan. Now Georgie has put it up by another 2.5% as part of his fiscal plan, clawing back the lost 2.5%. Fiscal plans – ain’t they fine?
2. Acrylic nails (as mentioned in Anna’s article above): these are ugly, shovel-shaped slabs (often decorated with sequins or tiny paintings of drive-by shootings) which render the wearer unable to use them for anything beyond computer bingo, picking the salad out of a doner kebab or dialling the Jeremy Kyle Show. So a homemade sarnie is right out. Even a Toast Topper can has a ring pull, after all. End of.
I thought ready-made sandwiches (as a grocery item) were zero-rated for VAT, unless they were delivered as part of a delivery contract or a specific catering do.
Well, that’s what HMRC seems to think, anyway (look at item 3.3) http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageLibrary_PublicNoticesAndInfoSheets&propertyType=document&columns=1&id=HMCE_CL_000118#P67_4124
VAT free indeed. Unless it is hot.
Meatball subs, burgers, chicken fillet things and all that have VAT on them whereas a bog standard M&S triangle of stodge or any other cold sandwich does not.
Hi Anna, like your blog, always wondered how you managed to the news so fast after all you live in France. Where you can only get BBC World or Prime. Unless you saying that you are breaking the law and watching BBC or ITV. Being such a responsible elder citizen with such moral high standars I am sure I have misunderstood.
Indeed you have “me”. Misunderstood the law, that is.
It is not illegal to watch the BBC from outside the UK.
The Astra 2D satellite carries an unencrypted signal from the BBC – their choice, on economic grounds apparently.
They might not like the idea of ex-pats watching their putrid channel, but as long as they continue to transmit without encryption, there is nothing in the laws of any European country – including the UK – that prohibits you from watching it. Nor from accessing their news on-line.
Perhaps you are confused by the fact that Sky does encrypt their signal, and therefore it is only available to those who have a decoder registered to an address in the UK – and carried accross the channel illegally? They also carry the BBC signal. I am aware that there are many thousands of those now in France and Spain – one curiously in the home of an ex-Director of Sky known to me!
The BBC is remarkably petty, for although they are aware that I and many other like me can receive their signal perfectly legally, they do block us from the iPlayer service, thus restricting our ability to watch missed programmes.
However, your comment presupposes that I turn to the BBC for my news – you cannot be serious!
I prefer my news unadulterated, direct from AP or Reuters, and hold subscriptions rights to both.
For entertainment value
Along the lines of this post, and when talking to people who are convinced, “It’s just not fair!!” I point them to this site. For no political or charitable reason, just for a simplistic reality check.
http://www.miniature-earth.com/
Enjoy your writings. Thank you.
The old image of pensioners counting the pennies and huddling before a single-bar electric fire is so obsolete. The Institute for Fiscal Studies recently issued figures showing that, of the 4 broad groups in society, pensioners are the LEAST likely to be below the official poverty level. I, and most of my pensioner friends, are doing very nicely thank you.