How 20% VAT affects you

We have updated our prices today, January 4th 2011, to reflect the Coalition Tax which has raised VAT from 17.5% to 20%. From now on, for every five pounds you spend, one pound is going to the government. Great huh?
To avoid silly prices like £5.31 and so on, we have changed our product prices to the nearest 9p. That’s nine pence, not ninety-nine!
This means that on some products, we are actually absorbing some of the cost of the hike in VAT for you. On other products, you might pay a few pence extra, no more. We certainly have not used the VAT rise as an excuse to raise our prices, unlike other companies.

The Snorestore Way

We make no secret of our political allegiances. Our company, Snorestore, operates on fair principles. We pay our staff a decent living wage. They get proper holidays. We support them when they are ill. We pay company corporation taxes, our own incomes taxes, correct levels of National Insurance etc and we’re not at the beck and call of shareholders demanding hefty dividends. In short, we don’t rip the tax payer off and we don’t stuff money in offshore accounts. Unlike some.

Gideon Osborne, Chancellor

Higher National Insurance or higher VAT?

As both employers and employees, Snorestore would have been more than happy to pay increased National Insurance contributions had a Labour government been returned to power in May 2010. The increase in VAT to 20% is a tax on the poor, who have always paid proportionately more VAT out of their meagre income than the rich. Higher National Insurance contributions only affect those who are in work. Most of the poor, who include pensioners and many children, are not in work. Channel Four News’ esteemed Cathy Newman has fact-checked Osborne’s justifications for penalising the poor and found them wanting: Stretching Credulity.

Greedy bankers and the bailout

If the banking industry had paid its über rich employees 10% less in the years from 2000 to 2007, the banks would have saved themselves a colossal £50 billion*. Coincidentally, £50 billion is what you and we paid to bail the banks out when their disastrous lending policies came home to roost and almost caused the collapse of the UK’s financial sector from late 2007 onwards.*
The cost of the bailout is now being shouldered by you and by us. Not by the banks – who continue to pay stupid bonuses – but by my granny, your baby and every other honest person in the land. No-one can possibly argue that VAT at 20% is fair when the men who caused the problems are still coining it at our direct expense. It is indeed, the “wrong tax at the wrong time.”

*Beyond the Crash” by Gordon Brown.

Further Reading

The good folk at Left Foot Forward have a handy deconstruction of the Coalition’s VAT rise – that’s the one they swore they wouldn’t implement, remember: Five VAT Facts. Meanwhile the BBC tries to put both sides but the facts speak for themselves: Osborne on the rack. And finally, the majestic Sunny Hundal blogs on how it’s so easy to switch sides once you get a ministerial car to ferry you around: Broken Promises. And we haven’t even mentioned student fees …