Purchase Tax.

[whyperion]

Any ideas how purchase tax was worked out on a combined TV/Radio/Record Player ( If the same % rate applied not a problem , but I have a feeling I read that Radios and Record Players had differing rates , and I presume TVs might have had a third rate, combinations I suppose took the highest rate)

[threeseven]

This may help:-

purchase tax

[G6Tanuki]

Though I'm not *quite* old enough to remember it, the actual rates of purchase-tax along with the things the different rates applied to, were the subject of frequent Budget changes to limit/encourage economic activity as the government-of-the-day saw fit.

Example: in 1948 the purchase-tax on televisions was raised from 50% to 66.7%.

There were some oddities - a "Radiogram" was at one time seen as a luxury item so attracted a higher rate of P.T. - leading to some enterprising manufacturers selling "Console radios" which were a radiogram-minus-the-record-deck thereby incurring the low(er) non-luxury-goods rate of P.T. The record-deck was of course available for fitting into the conveniently provided hole at a later date.

(A similar trick was used by people in the 1950s who bought a van - incurring lower purchase-tax than the equivalent estate-car - then fitted side-windows and rear seats in it).

As well as varying the rates of purchase-tax, the other lever governments used for controlling the economy was by way of 'credit controls' essentially varying the amount of up-front deposit needed when entering into a hire-purchase agreement. This led to a lot of "stop-go" boom-and-bust cycles in the economy in the 1950s/1960s and was in part the cause of the demise of some chunks of the UK radio/white-goods trade when they experienced massive swings in consumer demand leaving them with over- or under-capacity in their production and distribution systems.

[turretslug]

Also, the quibbles over purchase tax on Eddystones that did/didn't feature internal speakers, then did/didn't feature BFOs- affecting whether they were considered to be domestic or professional market products.

The perils of non-technical legislators getting involved in the minutiae of definition on the changeable wind of political whim.

[mark pirate]

Example: in 1948 the purchase-tax on televisions was raised from 50% to 66.7%.

It goes to show that you had to be very well off to afford even a relatively cheap set back then, My little Pye D18T 9" console set sold for £60 8s 8d with purchase tax of £11 1s 8d in October 1948 according to the ad below, in todays money that is over £2,000!

Mark

[broadgage]

IIRC, purchase tax was levied at significant rates on most or all household electronics, but was NOT levied on components or spare parts, including kits for assembly into say a TV set.

This not only gave a useful saving to the home builder, but led to crafty suppliers offering "kits" that required very little assembly and no technical knowledge to assemble, simply to evade the purchase tax.

In general purchase tax was levied on goods for domestic use that were considered to be luxuries, but was not levied on things considered to be essential.
Both the tax rate and on what it was levied altered frequently.

Purchase tax was not usually levied on goods considered to be for trade or industrial use.

The levying or not of purchase tax was also sometimes altered to discourage imports, thereby saving scarce foreign currency.

[Alan Stepney]

Interestingly, Purchase Tax was introduced as an emergency measure during WW2, with the promise that it would be removed once the war ended. (No comment.)

I bought a lathe, (a Myford ML7) just before Purchase Tax was replaced by VAT, as they didnt have any tax under PT rules but were going to when VAT came in.
That saved me the 10% (the then VAT rate) price increase that I would have had to pay a few months later.

There were lots of anomalies with Purchase Tax, and with such frequent changes, it became a nightmare for manufactures and retailers. Plus confused the public.

[antenna441]

My Saturday job in1962 was in an Iron Mongers, and I seem to recall that the rate of PT on electric drills and the like was 22.5%. An oddity was that milk saucepans were considered to be essentials so no PT but a saucepan with a lid did attract PT. The other thing I recall was that the price of cars varied from year to year, because of the PT rate.

[vidjoman]

Purchase tax was levied on the wholesale price of the goods - the price from the manufacturer to the shop. The shop had to pay it in full when the goods were delivered. The customer of course repaid what the shop had paid plus the price of the goods. It the PT went up the shop might make a few extra pounds but if the PT went down it was the shop that lost out on all the taxable goods it had in stock. In those days there was retail price maintenance which kept the prices steady, but sometimes a little on the high side as it was the manufacturer that set the retail price.

[G6Tanuki]

It's clear from these two valve-cartons in my collection that both Brimar and Mullard took a pragmatic approach to the wanton and frequent variations of purchase-tax.

[Boom]

Originally Posted by mark pirate

in todays money that is over £2,000!

I remember the first colour TV a relative bought in 1967. It was £300 The cost in today's money is a cool £4,875.84

http://tinyurl.com/66z39lg

Big telly these days a few thousand. Nothing much has changed in 'top end gear' just that we can get cheap stuff now too.

[P.Pilcher]

Of course I had a load of fun in the purchase tax days as a teenager: The tax was applied of course to the price of the goods paid by the retailer to the manufacturer. A knowledge of the tax rate in force at the time and the purchase tax amount which was always an extra being added to the retail price simply enabled the trade price to be calculated. Some retailers hated their profit margin to be calculated and bandied about! Happy days!

P.P.

[Synchrodyne]

The existence and odd incidence of purchase tax slewed (or skewed) product design, as well. In the hi-fi field in the 1950s, PT was applicable to radio tuners but not to amplifiers. Thus in terms of pricing to the consumer, it was advantageous to have tuners (taxed) draw their HT and LT supplies from their associated amplifiers (untaxed), rather than include their own power supplies, which would increase that part of the cost exposed to tax. In turn that meant that unpowered tuners were the norm. Also, there was a tendency to avoid including cathode-follower output stages in tuners (which would also add to the taxed cost) but rather use the amplifier input stage as the buffer for the tuner demodulator. That was non-trivial in the sense that AM demodulators needed to see an adequate impedance to avoid upsetting the AC-to-DC load ratio and so causing distortion, and that FM tuners often needed to see the right impedance to avoid de-emphasis errors.

The gradual swing to self-powered tuners in the UK is generally viewed as having started with the original Leak Troughline in 1955. Here Leak did not want its design to be constrained by the often limited extra HT and LT current capabilities of amplifier power supplies.

Some makers for a while offered both unpowered and self-powered versions of their tuners. And some offered outboard power supplies, which did not attract purchase tax. The attached Chapman price list from circa 1956 is indicative.

Cheers,

[kalee20]

That's a very informative post, Synchrodyne, thanks! Always of interest to know why things sometimes aren't designed optimally from an engineering perspective.

[Stylo N M]

Hi,

I saw in an old t.v advertisment the cost of the t.v was 19 guineas, i expect that would be quite a lot in today's money.

Paul.

[emeritus]

Thanks for the link to purchase tax info. I have some 1950's TV and radio leaflets , mostly undated, and the purchase tax rate should help narrow down their dates.

I became aware of PT idiocies in the 1960's, when a cine reel did attract PT, but its can did not when sold as individual items, but a reel and can sold as "reel and can", attracted PT on both. I don't know if this applied only to metal spools or if the same applied to plastic quarter inch tape reels, which were mechanically interchangeable with "Standard 8" 8mm cine reels. I don't recall tapes being sold in anything other than cardboard boxes in the 1960's, other than EMI's "Emicase" plastic containers.