Anyone else moving their business to UK because of higher vat / bad government here?

gigino

Was in a small retailer today. He is struggling and trying to compete against internet shopping from UK. As more + more retailing is going online, he has plans to do the same, but there is a flood of stuff coming from discount sellers abroad who have the advantage of cheaper vat and overheads. The progressive Irish retailer has been trying to sell abroad, but with high transport costs to the UK ( a huge market of 60 million people ) its difficult. The government now signalling it intends to increase vat from an already high 21% to 23% ( and probably 24 + 25% the following year ) shows it intends to make it increasingly difficult for Irish based businesses. Margins are already skin tight, the Irish self employed retailer has no pension or holidays etc. ( not surprising when the UK competitors pay their staff £6 an hour and have cheaper vat, cheaper transport costs, cheaper professional fees etc ). To cut a long story short, this retailer says he is about to throw in the towel here, and move his business to the North or Britain. The world is going online, and the government clearly wants to shut down luxury retail based operations here.
Fingers crossed the vat rate will not increase in the budget + a few jobs can be saved here. The straw that breaks the camels back etc. I know on line + cross border shopping will increase a lot if government wants to make shops uncompetitive here.

starbelgrade

The UK VAT rate went up by 2.5% in January last.

Plus it's not practical to simply move most businesses to another country especially those who rely on their local customers for business.

the groutch

http://nintendookie.files.wordpress.com/2010/08/worlds-smallest-violin.jpg

starbelgrade

the groutch wrote: »

http://nintendookie.files.wordpress.com/2010/08/worlds-smallest-violin.jpg

A lot of small businesses will struggle with the hit in sales the budget will inevitably bring about. For those on small profit margins, that could actually cause some to lose jobs & others to close.

It may be a small violin to you, but it's gonna be a big deal to a good few people.

gigino

starbelgrade wrote: »

The UK VAT rate went up by 2.5% in January last..

its still cheaper than the Irish rate

starbelgrade wrote: »

Plus it's not practical to simply move most businesses to another country especially those who rely on their local customers for business.

People will shop wherever they perceive to be cheaper. If you are selling online to Europe and paying 23% vat here versus 20% vat in UK ....well if profit margins are tight - as they are in some online shops - it makes sense to base your activities in a low tax country. Look at ebay in Ireland - it puts all its vat transactions from Ireland through Luxembourg, where vat is cheaper.
He is right, some business people have closed their shops and emigrated already, more should follow.
The government should realise 21% of something is better than 23% of nothing.

earpiece

the groutch wrote: »

http://nintendookie.files.wordpress.com/2010/08/worlds-smallest-violin.jpg

starbelgrade wrote: »

A lot of small businesses will struggle with the hit in sales the budget will inevitably bring about. For those on small profit margins, that could actually cause some to lose jobs & others to close.

It may be a small violin to you, but it's gonna be a big deal to a good few people.

Spot the folk with regular income!

policarp

A tax increase woiudn't be so bad, if it was to pay for health care or education, but to pay off others debts, at the expense of those that didn't incur those debts is wrong. . .

gigino

policarp wrote: »

A tax increase woiudn't be so bad,

I'd say they will collect less money instead of more, by increasing the vat rate, as it will drive many people to shop in the North / online shopping.
Its not just to pay foreegn banks the govt needs the money - its to pay the public service pensions of people like Mary Harney, on a p.s. pension of € 120,000 per year.

Gee Bag

The increase in VAT is fvcking daft.

• It's a regressive tax meaning the lower your income the greater the relative amount you have to pay.
• It will increase the size of the black economy, its tough enough as it is trying to compete with people doing work for cash.
• It will mess up any one trying to run a business in the border counties.

IMO it would have been better to increase the rate of tax for high earners or increase the rate of corporation tax by 0.5 or 1%. Our obsession with a 12.5% rate is almost like a fetish. Multinationals aren't going to pull out over a slight increase in their tax rate when we are still miles behind the rest of Europe.

Gophur

Gee Bag wrote: »

The increase in VAT is fvcking daft.

• It's a regressive tax meaning the lower your income the greater the relative amount you have to pay.
• It will increase the size of the black economy, its tough enough as it is trying to compete with people doing work for cash.
• It will mess up any one trying to run a business in the border counties.

IMO it would have been better to increase the rate of tax for high earners or increase the rate of corporation tax by 0.5 or 1%. Our obsession with a 12.5% rate is almost like a fetish. Multinationals aren't going to pull out over a slight increase in their tax rate when we are still miles behind the rest of Europe.

Do you not realise this VAT increase was one of the conditions signed up to when we were bailed out by the TROIKA?

Gee Bag

Gophur wrote: »

Do you not realise this VAT increase was one of the conditions signed up to when we were bailed out by the TROIKA?

Doesn't mean it's right

gigino

Gophur wrote: »

Do you not realise this VAT increase was one of the conditions signed up to when we were bailed out by the TROIKA?

they were not that specific. Merely that the budget decefit be greatly reduced. Which means reducing government spending and increasing taxes. The Troika does not want our retailers to go bust / cross border + online shopping to increase. The Troike is puzzled why government spending is still so high, and why our politicians, public service + social wefare is still considerably higher than in their countries. Thats the elephant in the room.

gerryo777

gigino wrote: »

they were not that specific. Merely that the budget decefit be greatly reduced. Which means reducing government spending and increasing taxes. The Troika does not want our retailers to go bust / cross border + online shopping to increase. The Troike is puzzled why government spending is still so high, and why our politicians, public service + social wefare is still considerably higher than in their countries. Thats the elephant in the room.

Most people on social welfare are on it for a reason. Increasing VAT hits these people and the lower paid the hardest because they spend most of their income every week. Its just the government hitting the weakest in society again, nothing new there though!!!

Gummy Panda

gigino wrote: »

they were not that specific. Merely that the budget decefit be greatly reduced. Which means reducing government spending and increasing taxes. The Troika does not want our retailers to go bust / cross border + online shopping to increase. The Troike is puzzled why government spending is still so high, and why our politicians, public service + social wefare is still considerably higher than in their countries. Thats the elephant in the room.

You do realise that UK companies charge irish vat?

If a UK based company has over €35k revenue from irish customers with a year, under EU law they must pay the VAT of ireland to the irish revenue.

gigino

Gummy Panda wrote: »

You do realise that UK companies charge irish vat?

no they do not. Asda in Enniskillen is one of the busiest ASDA's there is, and the huge car park there is always full of southern reg cars - yet it does not pay a penny in Irish vat. I am sure it does not want to, given Irish vat is higher than UK vat. Tell the thousands of Irish shoppers there each day to queue and pay higher vat so our public servants can live and retire in luxury.
I have a cousin a a place in England which does mail order to Ireland : his company pay vat @ UK rates on their exports. Simpler and cheaper that way ; they would laugh at you if you told them they should pay 23% of their hard earned turnover to the bl**dy Irish government lol.

Gummy Panda

gigino wrote: »

I have a cousin a a place in England which does mail order to Ireland : his company pay vat @ UK rates on their exports. Simpler and cheaper that way ; they would laugh at you if you told them they should pay 23% of their hard earned turnover to the bl**dy Irish government lol.

I meant online retailers and yes they do. HM customs & revenue would advise him to do it as Irish revenue can and will chase him for it.

3 Non-established suppliers making distance sales to Ireland

3.1 Distance sales covers mail order sales and phone or tele-sales made to persons in the State who are not taxable persons, by a supplier registered in another EU Member State where such supplier is responsible for delivery of the goods.

3.2 Where the value of distance sales to the State by a supplier in another EU Member State exceeds €35,000 in a calendar year that supplier must register for VAT in the State and must account for VAT at the appropriate Irish rates. If the threshold is not exceeded, the supplier may opt to register and account for VAT in the State on his or her distance sales.

3.3 Non-established suppliers making distance sales of excisable goods (spirits, tobacco etc.) to the State are obliged to register for VAT in the State irrespective of the level of turnover.

Revenue.ie

But hey, don't let the facts get in the way of your ill-informed rant..

The_Thing

Disguised as concern for the Irish retailer, this thread is just another attempt at public-sector bashing by one of the usual suspects.

gigino

Gummy Panda wrote: »

Irish revenue can and will chase him for it.

lol lol You think the Irish revenue has the time, skill or resources to chase every business outside the state ( and ask them to hand over 23% vat to them) who sells goods - online or offline - to citizens of this state ? There are millions of businesses outside the state who sell / have sold / posted to Ireland. Sorry to disappoint you, the credit card machines abroad do a total at the end of the day and the vast bulk of businesses overseas do not and will not pay 23% vat to the Irish government, and other vat rates to other countries. People simplify things and pay the vat at the lower rate they can get away with. Look at ebay. Ebay has offices in Ireland, employees in Ireland, and yet when Irish customers list goods with ebay Ireland, www.ebay.ie , the vat on the fees they are charged by ebay Ireland are at the luxembourg 15% rate.

The_Thing wrote: »

Disguised as concern for the Irish retailer, this thread is just another attempt at public-sector bashing

I am concerned both for the welfare of the Irish retailer as well as the public service ; it is vat from the Irish retailers which goes to support government spending like the public sector + social welfare. If vat is raised and people do not shop as much in Ireland ( south of the border ), it puts people on the dole here, less vat is collected and it has a knock on effect on the welfare of our public servants. I thought public servants like you would like to preserve jobs and conditions in our public service.

Gummy Panda

gigino wrote: »

Gummy Panda wrote: »

Irish revenue can and will chase him for it.

lol lol You think the Irish revenue has the time, skill or resources to chase every business outside the state ( and ask them to hand over 23% vat to them) who sells goods - online or offline - to citizens of this state ? There are millions of businesses outside the state who sell / have sold / posted to Ireland. Sorry to disappoint you, the credit card machines abroad do a total at the end of the day and the vast bulk of businesses overseas do not and will not pay 23% vat to the Irish government, and other vat rates to other countries. People simplify things and pay the vat at the lower rate they can get away with. Look at ebay. Ebay has offices in Ireland, employees in Ireland, and yet when Irish customers list goods with ebay Ireland, www.ebay.ie , the vat on the fees they are charged by ebay Ireland are at the luxembourg 15% rate.

The_Thing wrote: »

Disguised as concern for the Irish retailer, this thread is just another attempt at public-sector bashing

I am concerned both for the welfare of the Irish retailer as well as the public service ; it is vat from the Irish retailers which goes to support government spending like the public sector + social welfare. If vat is raised and people do not shop as much in Ireland ( south of the border ), it puts people on the dole here, less vat is collected and it has a knock on effect on the welfare of our public servants. I thought public servants like you would like to preserve jobs and conditions in our public service.

Those businesses don't sell enough a d I know of one UK company that was contacted and informed of their Irish VAT obligations but I might as well talk to a brick wall here.

Downlinz

Looking at OPs posting history (and the lack of specifics about this "small retailer") I would imagine this is a made up story to try and shock people into a reaction.

Nothing to see here.

gigino

Have a look at the streets of many towns. You will see half the businesses closed down in many places. Would not 21% of something be better than 23% of nothing ?

mehr

To start with i did not agree with govt saying they are promoting tourism by introducing a lower 9% rate earlier this year. What we saw happening was most of the businesses kept their retail prices same , but were paying 9% vat instead of 21% and 13.5% on certain products. i.e. net prices went up with gross prices staying same.
that resulted in decrease in vat revenues for the state.
i would rather have a universal 20% rate for both goods and services rather than increase to 23%.

we are going backwards, a small increase in income tax specially on higher earners and introduction of some kind of tax payments against welfare payments would had been welcome. there are families around who take in fair monthly welfare payments whereas a regular working person ends up paying taxes on his earning.

I for one dont agree with vat increase.

Anyone volunteering for a Campaign on Face Book. Lets have a poll somewhere.