Model Forum / General / Railroads / April 2010

I have a sneaking suspicion it’s simply down to publicity !

I fear the main political parties / banks don’t really give ‘two
hoots’ about small businesses’s.

Whoever brings in a non multiple tax system would get my vote.

The problem is that, as said on this very group,  if VAT was abolished
or reduced would the reduction get passed on ?

Chris

From the country's point of view, VAT is a more sensible tax than
employers' NIC. The former taxes all (well, most) consumption regardless
of where the goods are made or services performed - i.e. home grown and
imports. The latter directly taxes UK employment, thus making it more
economical to export jobs to lower cost countries, but gets nothing
whatever from imported goods or services.

The only trouble with VAT is that the rules are set out by the idiots
savant in Brussels, who also get a cut of the receipts to spend on their
monstrous useless bureaucracy.

The question you have to ask yourself is, is it worse for Hornby to go
broke, or for UK plc to go broke? (I know which I prefer, though I have
to declare a marked lack of direct interest here, as N gauge and O gauge
are my areas of activity.)

David

It will happen whoever wins. It's the only sensible way of raising the
amount of tax neccessary to pay off our debts. A massive hike in
income tax hits the less well off even harder (no VAT on essentials
such as food and kids clothing). Personally I favour tax on
consumption. The trouble is you can be damn sure they won't reduce any
of the other taxes!

MBQ

No doubt Hornby are going to blame their next price increase on the NI
hike.

Fred X

Hi John,
You stirred up a nest with this one, eh? We take it for granted that there is
a run-up to what passes for a democratic election in this country, and in
this period a lot of lies are told, a lot of deception is laid down, and no
single promise or policy can be counted on if that particular party achieved
top-dog staus. First they will set up their own access to the milk and honey
suddenly available, (backhanders, secret future job promises and hidden
retirement funds), only after that is done for them and their mates will they
give a thought to the manifesto promises. Hornby plc signed an open letter, I
wonder how many employees were asked if it should be done, or if it was a
decision by the CEO, who most probably is either a supporter of the Tories,
or in the same lodge.
The case for NI v VAT as an income source is complicated, both have good and
bad points, not as simple as some replies make it sound. In all economics a
balance is vital. A large amount of unemployed strains a country. People kept
in work, (no matter what the cost), pay tax and NI, they take money home and
it gets spent in the community, which then pays VAT into the central funds. I
see no reason to bring in Brussels as an arguement, all governments, for
centuries, have taxed everything they could get away with. Better to use
history of this country, Corn Laws and Window Tax spring to mind.
I feel very sorry for small business, closed down for the slightest reason by
banks who advertise, on TV, all the support they give to the same small
business. Government doesn't care, the destruction of high streets and local
communities will reduce the number of street cleaners, health and environment
officers, police coverage, so small business closure is good to help reduce
the national deficit, caused by America and greedy banks, not Brussels.
As a former management accountant I would suggest that you calculate the
shelf cost, turnaround time, value for money, customer demand and "possible"
future improvements by Hornby, (not likely), and then decide if you want to
keep stocking them, or at least maintaining a stock level of highest demand
items only.

Regards

Dave, (not the one who has already posted)

I notice that one of the companies critical of the Government's hike in
National Insurance contributions is Hornby plc - a company which abandoned
the UK for the vast majority of its production some years ago, and now
employs a relatively small number of UK workers.

Sure the rise will have an impact on them, but it will be marginal, and I'm
certain that any increase in VAT - likely if the Conservatives were to win
the general election - would have a far more significant effect on their
sales.

As a retailer of Hornby products I know that the public are becoming ever
more unfortable with the spiralling increase in the retail price of many of
their models, to the point that sales are starting to fall signifiantly in my
shop compared with those of other manufacturers.  An increase in VAT
could be the straw to break the camel's back.

John.