Reply to post: Re: You don't have to pay VAT for business expenses?

Amazon and eBay agree to expose potential VAT evaders for UK tax man

John Brown (no body) Silver badge

Re: You don't have to pay VAT for business expenses?

"But as I noted previously, VAT accounts for about a third of the tax revenues HMRC receives and any significant reduction in the amount collected could hit government expenditure hard."

Most taxes, but VAT in particular, is just a way of keeping the headline PAYE tax rate as low as possible for voting purposes. A tax free allowance of £12000 and then 40% income tax on everything over and abolish VAT would probably mean the vast majority of people would be no worse off, but no politician is going to do that. There are probably real figures somewhere showing how this would work that are more accurate than the one I just pulled from by arse :-)

Other benefits of abolishing VAT is the reduction on workload for importing goods, any business that currently has to deal with VAT and the number of people in HMRC who deal with VAT. That's probably a saving of billions in itself to the economy as a whole.

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