Print

Please login or register.
1 Hour 1 Day 1 Week 1 Month Forever
Login with username, password and session length

[Rods2]

It seems that the EU is on a mission to use the European Court of Justice to set UK tax law.

As a result of a recent case VAT is going to increase on holidays which will raise the average price by 3%

http://www.dailymail.co.uk/news/article-2434372/Holiday-prices-rise-EU-tax-ruling.html

[dbdb]

Reminds me of the bedroom tax.  The government describe that as the 'spare room subsidy' and say they only want to remove it.  This EU ruling is technically the removal of a tax exemption ('subsidy' or loophole).  In fact it could be seen as cracking down on corporate tax avoiders.

"Under the current system, wholesalers are able to sell the flight or passenger transport element of an EU package without VAT, under the 'VAT Transport Company Scheme'.
But once the new rules have come into force, EU travel wholesalers will have to account for VAT from the whole profit margin on sales of EU travel in the country in which they are established."http://www.travelmole.com/news_feature.php?news_id=2008367

I don't see the Daily Fail describing it as the 'holiday subsidy' though. 

Corporate tax avoiders will always squeal when caught at it.  They always say they will just pass the cost on to the consumers but economics doesn't work that way - they will have to bear a significant proportion of it themselves from their profits, the amount depending on how much they've already been screwing us and how much we are willing to bear (supply and demand).

[Rods2]

And who pays the tax, for the corporations to keep the same profit margin?

Churchill was right, try to create wealth through taxation is like trying to lift yourself up with the handle while standing in a bucket.

[dbdb]

its not about creating wealth through taxation it's about trying to stop companies avoiding their fair share of tax.  Profits are made by buying something at the lowest price they can and selling it to us at the highest price they can. The difference is not wealth creation, it's a tax on us by corporations.

[albitz]

Companies,corporations and individuals alike pay far too much tax in this country.The problem isn't the need to gather more money in taxation by whatever means.The problem is that the state (both the British and EUssr) need to spend a hell of a lot less of other peoples money,and leave it in the pockets of those who have earned it.
I see the EUssr has decided it needs £ billions more of taxpayers money to fulfil its promises and apparently the UK will have to contribute another few hundred million quid. This along with its previous recent increases in spending, will equate an overall rise in its total budget of around 8% in the last year. You couldn't make it up. They are very keen on telling the Greeks and others to drastically cut back on their spending. Shame they cant even begin to practice what they preach.

[dbdb]

And who pays the tax, for the corporations to keep the same profit margin?

According to economics it's not technically possible for a corporation to keep the same profit margin after a tax is applied, other things being equal.  The elasticity of demand would have to be zero. There are no products with zero elasticity.  The closest would be something like petrol or car insurance where people have to buy no matter what the price (however they will cut down a bit hence it's not zero). Holidays would have a high elasticity of demand - as the price rises people buy less. 

Hence when a tax is applied to a good or service the supplier can never pass all the tax on to the consumer.  Same for shoplifting or insurance fraud, suppliers always say that in the end the consumer pays it all but this is not true. If it was they wouldn't keep whining about it.