Wednesday, 19 March 2008

Hike in UK alcohol duty is bigger than advertised

I was out of the country, enjoying the benefits of a less punitive tax regime, for Gordon Brown’s darling glove puppet’s first (and hopefully last) budget.

I was pleased ;-) along with the health fascists at the British Medical Association (BMA), to see the "large rise", on top of the already outrageous levels of taxation imposed on alcohol by the glove puppet - They have been so effective on curbing alcohol abuse to date that much more of the same is a sure recipe for success.

The huge price hike in duty on alcohol (six per cent above inflation), 55p on a 70cl bottle of spirits coupled with the increase of 14p in the duty on a bottle of wine is bound to stop the quality single malt whisky fuelled drunken binges of retired colonels and vicars in our high streets at weekends. Not to mention the sparkling wine fuelled thuggery so prevalent in our towns and cities.

Of course it is a moneymaking exercise. The last thing the state wants is for us to cut back on buying alcohol as this would eat into their revenue. It makes a nice fig leaf for gouging levels of taxation to wave at the naive though - and an excellent excuse for ever more intrusive measures of social control.

It’s the gift that just keeps on giving because every penny increase in duty allows a corresponding increase in VAT, so that 55p headline increase is actually a hike in the Government’s cut of over 64p per bottle and that’s just the hike, not the total taken. Oh and don’t forget you already paid tax on the money you are being taxed for spending, when you originally earned it.

But we should all feel hap-happy about it because… Ahh! it’s allegedly going towards a good cause - towards ending “child poverty” by 2020.

New Labour are unlikely to ever have to actually live up to such a distant target. Though it would be nice to believe they might be slightly more effective at it between now and when they finally get kicked out of power, than the pathetic showing they have managed to make on this moving target to date.


Simon Fawthrop said...

I haven't time to research this, but doesn't the Eu take a (large) part of VAt receipts?

Which makes the increase even more annoying.

CFD Ed said...

GS, VAT (spit) was invented by one Maurice Lauré a French economist, in 1954. I am not sure what circle of hell was booked for him at that exact moment.

It was brought in to attempt to standardise taxes on goods/services tax within the EU and ensure that more tax than spent could not be claimed what goods moved between member states.

Typically it has actually resulted in the development of the 'carousel' system of fraud involving large quantities of valuable goods (often microchips, or mobile phones)transported from one member state to the other.

It developed in the in the Benelux-countries 1970s. Now the British tax payer is the main victim. The British judicial system being regarded as the weakest in the EU by the criminals practicing the fraud.

EU law requires that the standard VAT rate must be at least 15% and the reduced rate at least 5%. The application of VAT varies according to each Member State, within the framework set out by Community legislation.

As far as I know the EU only insists we have VAT, the money raised actually goes to the treasury.

Obviously we pay unreasonably huge sums into the EU’s coffers, to be spent by a system who’s accountants have refused to sign off on them for years they are so corrupt - but I don’t believe they take the VAT directly.

Lucky us, we didn’t have VAT before we joined the EU.