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Call to cut VAT for OAPs and the disabled
LIBERAL Vannin leader Peter Karran is calling for VAT to be charged at a lower rate for services provided to the elderly and disabled.
He believes a vulnerable section of the community will be badly hit by the rise in VAT to 20 per cent.
And he has written to Treasury Minister Anne Craine urging her to consider a reduced rate for cleaning and care services no longer paid for by the state.
But his demand has been ruled by Treasury, with Mrs Craine insisting there is little opportunity to extend the use of reduced VAT rates.
Mr Karran said in his letter: 'We have a situation where a section of the community who, due to the fact that we do not provide the services which we previously did in connection with home help years ago, now find themselves having to use commercial firms for cleaning and care services, all of which charge VAT at 20 per cent.'
Calling for Treasury and the Department of Social Care to look at reducing the VAT rate charged for services to the elderly and disabled, he said: 'I believe it needs to be a joint venture particularly allowing for the increasing number of people who are having to pay privately for services which I have thought should be paid by the state.
'While appreciating the current economic climate and that decisions have to be made, I believe this would be an initiative that would be welcomed by this section of the community.'
But in her reply Mrs Craine pointed out that current legislation allowed for routine domestic tasks such as housework, shopping and collecting prescription or pensions for the elderly, sick and disabled to be exempt from VAT where provided by charities or public or state regulated bodies.
She said: 'The Treasury, having had discussions with HM Revenue and Customs, considers there is little opportunity to develop further the use of reduced rates.' She said any changes to the current EU VAT rules would require approval from all 27 members states.
WHAT DO YOU THINK?
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YOUR COMMENTS
The question has to be why we on the Isle of Man still pamper to every whim of the UK government when other Crown dependencies charge less VAT. Maybe it is time the money was paid into the Manx coffers and not used to line the pockets of the UK treasury. Or maybe the UK is giving us something we cannot do without! They currently want to withdraw health cover; we pay a licence fee for a TV service that is woeful what next? Maybe it is time the Isle of Man became independent!!
DDS.
The whole island will be affected by the VAT rise to 20%. The best solution is to get rid of it altogether, not just for one section of the population. A 10% rate might be reasonable but a tax on purchases and services of anything more is excessive and just encourages the continuation of wasteful public spending.
RON
So once again people are complaining.... The economic pain has to be felt by the whole community, we can't always protect the elderly. As much as it would be nice it is just not realistic to offer them a special VAT deal. Their pensions are funded from our current taxes so it is only fair they get the same deal as everyone else. As mentioned in the article they already have some services excluded from VAT and so there is no welfare issue.
THE PRESIDENT OF FOXDALE
A nice 'headline grabbing' story but our politicians need to get in touch with reality rather than introducing uncosted red herrings. They have already indicated that we have a significant revenue shortfall. If we reduce VAT to one section of the community we have to find ways of plugging the additional revenue shortfall this creates. This can either be by increasing income tax rates, abolishing the 'tax cap' or by cutting government expenditure further. Would Mr Karran now support reductions in politicians salaries, their non-contributory pensions and abolishing the LegCo to fund his proposal? Or will he now be advocating abolition of the 'tax cap'? Or does he see an increase in income tax as the way to do it? We have all seen that politicians have been slower than slow to cut back on their own benefits whilst advocating austerity for others. The 0.1% of people who benefit from the tax cap have inordinate political clout. So realistically neither of these routes would be available to help the elderly and disabled. So is Mr Karran supporting an income tax increase?
KK
We have to ask the EU !!!! When did we join???? I cannot remember voting, vote the lot of the out, they are all useless. As for the shortfall, what shortfall? We apparently get paid an invoice every 2 years, so how can there be a shortfall next year or the year after if we have not got or never had the money !!! As for vat, put it down to zero and then put 10% vat on everything across the board. There is money pouring into treasury coffers, do not believe what is coming out of the wedding cake, unless it paying towards their pensions !!!!!!!
CJ
This now shows up the true value of the Isle of Man and its so-called independence,we are not part of the UK was the quote,we have this gang of of 32 supposed to be running the place, they have no power to alter the VAT,all they can see on this 20% VAT,is a extra 3million to waste on their pensions etc, I think its time to throw in the towel,and become part of the UK. Is there not a reduced rate of VAT on Electricity bills of 5%?,where did that come from?,what is the point of paying this useless lot of free loaders who can't sort out the RHA,or the VAT loss,that they have to go cap in hand to the EU states for permission.
EORH
I would like to understand why people assume all old people are poor
and need special financial assistance. There are many old people who
are rich, having paid off their mortgage, and accumulated considerable
assets in their long life. Financial assistance should be targeted at
the poor who are unable to pay for their needs regardless of their
age. I would support a VAT reclaim scheme for poor shoppers, where all
receipts under a fixed threshold could be submitted along with the
income tax return to increase the limit for tax free earnings, much in
the same way that businesses claim business expenses against tax.
Receipts over a certain value would need prior approval at the tax
office. Anyone who tries to submit receipts for more than they actually earn can then easily be caught by the tax inspectors.
LAXEY DWARF
It seems to me that the Isle of Man cannot make up its mind whether it is independent of the EU/UK or not. It wants to be part of the UK for "defence" in time of war, but if what happened to the Channel Islands during WW2 is anything to go by, that is a waste of time. As the UK seems to want to separate itself from the Island anyway, why don't we have the courage to go the whole hog and really become independent? At the moment, it seems that we have one leg on the Island, one leg in the UK and one waving around somewhere in between.
MO
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Thursday 09 February 2012
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