The British Government raised duty on alcohol, tobacco and petrol by 8 per cent on December 1 to offset a cut in VAT (equivalent to Australia's GST). The VAT has been cut from 17.5 per cent to 15 per cent for 13 months in a bid to spark the economy.
Ok, so you drop the VAT 2.5%, then raise the duty 8%....so is that supposed to help stimulate the economy And I thought our politicians were a bunch of morons!
Here's what it acutally did
CONSTELLATION Brands – the US owner of Australian wine labels Hardys, Leasingham and Banrock Station – has reportedly sacked 50 British-based employees in response to an 8 per cent rise in wine taxes....
Constellation Europe president Troy Christensen told London-based Times Online that two duty rises this year had cost the company $122 million, and it would look at more job cuts and lower promotional spending.
Without wanting to support the British Government on this particular strategy I think the quotes provided are slightly out of context. The 2.5% cut in VAT was intended to lower the basic cost of living for us Brits by making it cheaper to buy the things necessary to stay alive. However, a few days after it was announced the Government realised that they had inadvertantly made it cheaper for us all to get drunk, so they raised duty in an attempt to solve this issue. The problem with their approach is that Duty is a fixed cost by volume whereas VAT is a % of cost, so it only works for products at the "average" cost. For example: Duty on a bottle of Nacional 31 is the same as Duty on a bottle of Cruz Ruby (about £2 per bottle). VAT at 17.5% (or 15%) of cost on the same products produces quite a variance!!
Yet another brilliant fiscal policy to make the world a better place :help:
...or a good time to take expensive wines "out of bond" by paying VAT at 15% of original purchase price rather than £17.5%
First,
for that move Briton is more appropriate :devil:
Second.
take a lot out of bond before they figure this one out too and raise the VAT only for alcohol. Or just get the Queen really drunk and hooked on Port so you can get a special "allowance" of a lower VAT for any Port bought or taken out of bond
And I thought our politicians were a bunch of morons!
