Posted by michael on June 19, 2008
More and more reports are coming out on the effects of the planned increases in Vehicle Excise Duty.
The idea of these tax increases were to influence buyers of new cars to make choices to choose smaller, more fuel efficient and more environmental friendly cars. The plans were announced and were accepted as reasonable by most people.
A short time later, it was quietly states that the tax would apply to all vehicles purchased as new from 2001. So all cars purchased in the last seven years are also to be taxed.
It would be kindest to say that the government did not understand the consequences of their legislation.
In the last few months used cars have lost 25% of their value, family cars have lost even more.
The worst thing about these tax plans are that they effect people who buy second-hand cars significantly more than those who buy new cars.
The tax on (say) a £2000 used car is the same as a brand new car worth (say) £10000 car if they fall in the same emissions bracket.
Worse still, as new cars become more environment friendly their owners will pay less tax than people with older models of the same car!
This is a tax that affects people who buy used cars more than those who buy new cars, and the less that one can afford for a car, the higher is the proportion of tax that they have to pay.
An own goal? Looks like it.
Posted in Blogroll, tax | Tagged: car, cars, motor, tax | 1 Comment »
Posted by michael on June 19, 2008
The Bank of England governor has said that the UK faces its “most difficult economic challenge for two decades”.
Mr King also warned that real take-home pay would stagnate, making life difficult for some families. We shall have to see what his definition of some is! I know that the last thing a person in his position should say is that many or most people will have difficulties. But the some has to include everyone on low wages, whether it is those on benefits, smaller pensions or simply those on the minimum wage. That is a lot of people.
The reason why so many people are going to be seriously affected is that the price increases are on the basics, such as food and power bills. People have to pay these bills, they have very little room to manouver. They will also have to pay mortgages, loans or credit card bills that they may have.
There will be very little money being spent on other things, which in itself will cause problems with the economy!
Posted in Blogroll | Tagged: depression, economy, recession | Leave a Comment »
Posted by michael on June 17, 2008
We now have a much better idea of what we are facing over the next 12 months.
The Consumer Prices Index (CPI) rose by 3.3% in May, up from 3% in April, the fastest rate since the CPI measure began in 1997, although, to be honest, that was not that long ago! It is thought that the index will exceed 4% in the next 12 months.
On the face of it these figures would not seem to be that bad, but I think that they are bad news to the huge number of people in the UK who do not have highly paid jobs and plenty of disposable income!
The idea of a price index is that it measures changes in prices of a ‘basket’ of goods and services that people, on average, spend their money on.
So when we look at the items with the biggest impact to ordinary people we find that that they are food and non-alcoholic drinks! Meat products and vegetables in particular are increasing in price.
The price of oil is nearly double that of 12 months ago. Most people have been affected the price of petrol and diesel at the pumps. What they probably also realise is that they are paying for the extra fuel costs of the haulage companies and the increased energy costs of food production in the factories and on the farms.
Gas prices are more than double what they were 12 months ago. Household energy bills are going up and will continue to be high whilst the wholesale price of fuel is high.
What I can see behind this headline inflation figure is a big impact on the lower paid and those with little disposable income. Of course there is good news. Apparantly DVDs are now cheaper which is a relief!
The increases are on the items and services that people need to buy all the time. But there are very many people in the UK who simply do not have the money to pay the extra. They are going to have to find the money for gas and electric bills or they will be cut off. They will have to find the money to pay for their basic food requirements and necessities. They will have to pay their loans and credit card bills
But they will cut back on other items, which in turn will impact the shops and other services that are not essentials.
I do urge people to start cutting back their expenditure now! Avoid borrowing money to buy higher value items even if they seem to be a bargain! Don’t borrow more money or increase your credit card debt. Do everything that you can to avoid spending money and try to have a credit balance in your bank account. There are difficult times ahead. Start doing what you can now to help yourself over the next 12 months.
I have to take this view because it is the right thing for families to do! It won’t help the shops and other non-essential businesses unfortunately!
Posted in Blogroll | Tagged: cost of living, debt, families, household, recession | 2 Comments »
