From Greggs’ trading update comes a warning that the government’s plans to add VAT tax to takeaway foods “could have a material impact on our sales and profits”, depending on the outcome of industry consultations.
We believe there is an alternative to the Government’s proposal which will remove any anomalies and make the tax much simpler for both the Government and the consumer. We believe the solution is to see VAT charged on all food kept hot for sale in a heated environment after cooking, all food re-heated to order and all food supplied in heat-retaining packaging. This will very clearly differentiate between fresh bakery food and food that is being sold intentionally hot. Read more
An eye-catching headline from UBS.
On Wednesday, economist Stephane Deo explains how Greece could use a sort of proxy for currency devaluation — the erm, traditional answer to debt overloads — to help haul its way out of crisis. Read more
Zero Hedge has linked to a story by El Economista about a court ruling that Spain’s tax agency had inappropriately collected billions in value added taxes.
Included in the ZH post was the following note from Goldman researchers: Read more
FT Alphaville presents its all-singing, all-dancing UK budget coverage. We’ve got immediate analyst, debt market and ratings agency reaction as UK chancellor George Osborne’s simultaneously wields his axe on gilt issuance, and ups the capital gains tax. There’s an overview of the £2bn bank levy, as well as some estimates for how much it will cost each British bank. Plus there’s the VAT bombshell and its expected impact on inflation and index-linked gilts, not to mention UK retailers. And, finally, there’s Osborne’s tie.
This one got some parliamentary boos as Chancellor George Osborne presented his austerity Budget: a rise in the UK’s value-added tax rate.
Via Reuters: Read more
The ConDem government’s emergency UK budget will be unveiled next Tuesday.
There seems to be a growing consensus among analysts that we are in for an increase in Value-Added Tax (VAT). A jump in the tax from its current 17.5 per cent to 20 per cent would raise around £12bn, or 0.9 per cent of UK GDP, if it’s implemented from January 2011 (JPMorgan estimates). Read more
Chris Giles, the FT’s economics editor, is not impressed with the ConDem coalition agreement:
“Deficit reduction and continuing to ensure economic recovery is the most urgent issue facing Britain,” states the coalition agreement between the Conservative party and the Liberal Democrats. If so, the rest of the document does not live up to the billing. Read more
The FT reports this morning that FSA is calling for banks to spend almost £1bn on IT upgrades:
The proposed IT investment, estimated to be at least £892m over five years, is required to enable banks to produce a list of all customers’ deposits within 48 hours of the institution failing. This would allow the FSCS to ensure savers get their money back within seven days, limiting the risk of a collapse of confidence spreading. Read more