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PostPosted: Thu Apr 23, 2009 5:50 pm 
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And what exactly do you suppose Indexation means?
If the financial experts at the BBC say it's inflation, that's good enough for me.
You're just splitting hairs.

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PostPosted: Thu Apr 23, 2009 7:08 pm 
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gusmac wrote:
And what exactly do you suppose Indexation means?
If the financial experts at the BBC say it's inflation, that's good enough for me.
You're just splitting hairs.


not the same though are they, the Retail Price Index used for the calculations re-"indexing" are a far wider set of items than just inflation.


and accepting the BBC as verbatim and Gods word is not always such a good idea



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Where can I find the All Items RPI?
All items RPI data, along with All items excluding mortgage interest payments (optionally excluding indirect taxes) and All items excluding housing data are available in a number of places including 'Time Series Data' and 'RPI monthly data'.

RPI index values since 1947 are available from the RP02 table, RPI rates since 1948 are available from the RP04 table and RPI excluding mortgage interest rates are available from the RPIX table.

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PostPosted: Thu Apr 23, 2009 10:29 pm 
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wannabeeahack wrote:

not the same though are they, the Retail Price Index used for the calculations re-"indexing" are a far wider set of items than just inflation.


I think you're barking up the wrong tree a bit here - inflation and indexation mean more or less the same thing. What's important is what measure of inflation you use, and it's usually taken to mean either retail price inflation or these days there's consumer price inflation, but it could be anything else such as house price inflation, oil price inflation, wage inflation, taxi cost inflation or taxi fares inflation.

But for years if you heard the word inflation in the media then it meant retail price inflation, but they introduced the consumer prices measure because it was claimed that the retail prices calculation was misleading for the purposes required.

Which measure you use depends on the purpose you want it for - retail price inflation just provides an overall measure for things people buy in the economy, but if you want it for more specific purposes - taxi fares, for example - then a more specific measure should be used like petrol price inflation, which should roughly reflect oil price inflation, but clearly the two are measuring different if related things.

The terminology comes from the way these things are calculated, because unless you want something very simple - like tin of beans price inflation - then you need a method to come up with a plausible number.

Thus index numbers are used, which basically represent a basket of goods of the type of inflation you want to measure.

The rise in the index number represents the rise in prices, which in shorthand is called inflation. Thus inflation just means the rise in the index numbers, thus indexation effectively means 'based on the inflation rate'.

For example, if you want a figure for east of Scotland taxi fare inflation then you might use fares from Edinburgh, Fife and Dundee. Say the average fare was:

Edinburgh - £4.40 Fife - £4.00 Dundee - £5.00

Add them all together and you get a simple index number of 1,340.

Next year fares go up to:

Edinburgh - £4.50 Fife - £4.50 Dundee - £5.10

Now the index number is 1.410.

Thus the rise in the index is 5.2%

Therefore taxi fare inflation for the east of Scotland is 5.2%. The point is that while you could simply get a figure for the individual areas, a more meaningful figure should represent all the areas, and this might be used to work out a fare rise for Aberdeen, say. If you used Edinburgh alone then the inflation figure would only be 2.2%, but that is misleading compared to the other councils.

Of course, it's a lot more complicated than that - for example, because there are more taxis in Edinburgh than Fife then you could construct the index number to reflect this, because otherwise the index would be misleading if it just assumed all the councils had the same amount of taxis, as in the example above.

So retail price inflation is just the increase in the Retail Price Index (RPI) and the problem is what to include in the index numbers. It changes periodically - for example, they might take out cassette prices and replace this with CDs - and the new consumer prices index was thought up to provide a better measure by including mortgage repayments, but as I said what you include depends on what precisely you want the number for.


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PostPosted: Fri Apr 24, 2009 9:18 am 
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whatever you use, inflation or RPI, the chancellor can add or subtract any figure (plucked fron thin air)

i.e. this budget "2p/ltr now (no reason given) and 1p ABOVE "inflation" every following april" - dont forget, Gordon Brown is the guy who ended the "Fuel Duty escalator"

so basically he needs some money to bail out the banks and the drivers (and smokers and drinkers) are fair game, the 50% tax rate for big earners is cobblers. if i was on 250K a year id have an accountant (cos i wouldnt be PAYE) paying him £5K a year to save me tax......and probably paying sod all anyway

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PostPosted: Sun Apr 26, 2009 4:37 am 
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wannabeeahack wrote:
whatever you use, inflation or RPI


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PostPosted: Sun Apr 26, 2009 7:51 am 
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If you are vat registered, your fuel costs 2p per litre more thanks to the vat change!

The thing I often wonder is, as VAT is charged on goods and as services how can they justify charging VAT on the fuel pump price of fuel, as by my understanding, if you were to pay £1.00 per litre at the pump, it costs 13.04p for the VAT, 50.35p for the fuel tax, and 36.61p for the actual fuel.

So, should we not be paying 50.35p fuel tax, 36.61p for the fuel, and 5.49p for the VAT (I Think VAT Should only be charged on the fuel, and not the Tax!) making the cost of the fuel 92.45p per litre.


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PostPosted: Sun Apr 26, 2009 1:57 pm 
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andrewgoodchild wrote:
If you are vat registered, your fuel costs 2p per litre more thanks to the vat change!

The thing I often wonder is, as VAT is charged on goods and as services how can they justify charging VAT on the fuel pump price of fuel, as by my understanding, if you were to pay £1.00 per litre at the pump, it costs 13.04p for the VAT, 50.35p for the fuel tax, and 36.61p for the actual fuel.

So, should we not be paying 50.35p fuel tax, 36.61p for the fuel, and 5.49p for the VAT (I Think VAT Should only be charged on the fuel, and not the Tax!) making the cost of the fuel 92.45p per litre.


thats heresy

basically (with excise goods) you pay the cost of the goods, PLUS the duty then the VAT on the total, meaning you pay tax on tax....



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PostPosted: Sun Apr 26, 2009 2:48 pm 
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andrewgoodchild wrote:
If you are vat registered, your fuel costs 2p per litre more thanks to the vat change!


How so?

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PostPosted: Sun Apr 26, 2009 2:55 pm 
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gusmac wrote:
andrewgoodchild wrote:
If you are vat registered, your fuel costs 2p per litre more thanks to the vat change!


How so?


its gonna cost us ALL 2.3p a ltr more and 2.35p after the vat rises to 17.5%

if your vat regd you will claim more back.... :?

if your vat regd and using the FRS you charge 15% vat (17.5% come december) but hand over 9% of the invoice total to HMRC (8% in year one)

£100+vat = £115 - 8% = £108.56 less 22% tax on the £8.56 = £6.68

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PostPosted: Sun Apr 26, 2009 5:46 pm 
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gusmac wrote:
andrewgoodchild wrote:
If you are vat registered, your fuel costs 2p per litre more thanks to the vat change!


How so?


When the VAT rate went down the duty went up. So VAT registered businesses could only claim back the 15% instead of the 17.5% but the price remained the same. I pointed this out at the time.

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PostPosted: Sun Apr 26, 2009 6:22 pm 
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and it will cost even more this time and next time, and for non-vat regd businesses too

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PostPosted: Mon Apr 27, 2009 2:46 am 
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If they have the average mileage of 120K that will make them 10 years old


Right then, took my 5 year old Pug 406 with 300k on the clock to a dealer who effectively told me to f off and come back in 5 years! :P

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PostPosted: Mon Apr 27, 2009 3:03 am 
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grandad wrote:
gusmac wrote:
andrewgoodchild wrote:
If you are vat registered, your fuel costs 2p per litre more thanks to the vat change!


How so?


When the VAT rate went down the duty went up. So VAT registered businesses could only claim back the 15% instead of the 17.5% but the price remained the same. I pointed this out at the time.


Thanks grandad. I'm not VAT registered, so I didn't notice this.

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PostPosted: Mon Apr 27, 2009 8:00 am 
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gusmac wrote:
grandad wrote:
gusmac wrote:
andrewgoodchild wrote:
If you are vat registered, your fuel costs 2p per litre more thanks to the vat change!


How so?


When the VAT rate went down the duty went up. So VAT registered businesses could only claim back the 15% instead of the 17.5% but the price remained the same. I pointed this out at the time.


Thanks grandad. I'm not VAT registered, so I didn't notice this.


Lucky you. :sad:

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