Dan Neidle
👤 SpeakerAppearances Over Time
Podcast Appearances
There's a difference between the person who pays it and the person who economically is paying it.
And in the tax nerd world, you call that economic incidence.
We're all familiar with one example.
Who pays VAT legally?
And the answer is the shop pays VAT.
If I go to buy a chocolate bar, there's VAT on the chocolate bar.
Who is cutting the check to HMRC?
Obviously not me.
It's the shop.
Who is bearing the cost of the VAT?
Well, you know, that's me.
Obviously, if VAT went up by 20% tomorrow, the shop is not eating that.
I, the consumer, am eating that.
So we say the economic incidence of a rise in VAT falls on consumers.
Interestingly, the opposite isn't the case.
If you have a VAT cut, the shops tend to snaffle the profit.
But that's a different discussion.
So, OK, business rates.