Report About VAT

7/31/2019 Report About VAT

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Report aboutVAT

For Research skillLuo Siyuan10697901

Xue Di10697930

Gao Ya10697850


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Contents

Terms of reference ............................................................... 3

Introduction ........................................................................ 3

Research philosophy ............................................................ 4

The reason why the research selects positivist ....................... 5

Methodology....................................................................... 6

Data presentation .............................................................. 10

Data analysis ..................................................................... 17

Problem............................................................................ 21

Conclusion ........................................................................ 21

Recommendation .............................................................. 22

Reference list..................................................................... 24

Appendix..25


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Terms of reference

This report has presented the result of research and how the result came out

by using research methodologies and data collection techniques.

Introduction

The research question is how VAT influences ICB students demand in their

daily life. Will the students reduce the times of shopping for luxury? Will they

go to a restaurant or cook at home after VAT increased? Whether they will give

up smoking after the price of cigarettes increased or not? All the questions are

based on the background of Britain budget deficit.

Every year Britain runs a large budget deficit because the Government's tax

revenues are rarely enough to fulfil its generous spending promises. The

money they can't raise from taxation needs to be borrowed. Every year, this

budget deficit is added to the national debt. During these years Public finances

are out of control. At the very time tax revenues are declining and a debt crisis

is ravaging the global economy, but the politicians have chosen to go on an

unprecedented spending splurge. To fund it, the Government borrowed 170.8

billion in 2010 and borrowed another 167.9 billion in 2011.

(http://www.debtbombshell.com/britains-budget-deficit.htm,no date).

Therefore, the standard rate of VAT has risen from 17.5% to 20% on 4 January

2011. (http://www.hmrc.gov.uk/vat/forms-rates/rates/rate-increase.html, no

date). The government thinks the rise is necessary to help bring down the UKs

high budget deficit. However, some opponents say that the rise will block the

development of economy. So it is worth researching this topic. It is related to

the economics of UK and also it is significant to the development of the

country.
http://www.debtbombshell.com/britains-budget-deficit.htmhttp://www.hmrc.gov.uk/vat/forms-rates/rates/rate-increase.htmlhttp://www.hmrc.gov.uk/vat/forms-rates/rates/rate-increase.htmlhttp://www.debtbombshell.com/britains-budget-deficit.htm


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Research philosophy

This research has selected positivist to discuss the topic. Positivist is to be

regarded as mainstream in different areas. Social scientists use positivist as a

starting point to design their research. Positivist adopts quantitative

(mathematical statistics), or experiment to gather and analyze information to

create a simple abstract model. (Burrell & Morgan, 1979)

Its central thesis is that: the fact is to know each persons objective

environment and the external things by observation or sensory experience.

Positivist thinks that everyone has accepted different education but the

principle they used to verify sensory experience has no big difference. The

purpose of positivism is to establish the objectivity of knowledge. Comte thinks

that if human beings want to know everything, they must learn it and know it

with different situation. (Hughes & Sharrock, 1997) People need to have

direct or indirect feeling, to infer or recognize the experience, and infer the

knowledge which has not experienced during the study. Knowledge is not true

if people do not get it by experience.

Positivist takes phenomenalism as a starting point. Phenomenon means useful,

determinate, precise, organic and relative. Positivist treat phenomenon as the

root of all knowledge, they think scientific knowledge require the "evidence.

The relationship between philosophy and science is the central problem of

positivist theory. (Hollis, 1994)

Positivist is clearly defined sociological theory and its special object, against

with the traditional metaphysical way of thinking and judgment. This let

sociology get rid of the fetters of speculative philosophy, and become an

independent discipline. Its theoretical principles have a strong ontological

natural tendency to adhere to a unified view of science. It says that there is no

essential difference between social phenomena and natural phenomena, they

are a "objects", and therefore they follow the same rules of science. This


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confused the distinction between the laws of nature and the laws of society, the

natural sciences and social sciences. ( Walliman, 2005)

In exploring the rules of "objects", positivist says that natural science methods

are fully applicable to the study of human society, especially the application of

the analogy of the law in accordance with the natural science model. This

generates two important sociology parts organic evolution and mechanistic.

Positivist emphasizes on experience and perceptual information in the

community and insists the principle of empiricism. (Williams & May, 1997)

Positivist emphasizes on value neutrality. It requires that in sociological

research nobody can make individual value judgments. It is against the

personal emotional involvement, in order to maintain a strictly objective and

scientific. Positivist stressed to intervene in the lives of real society, stressed

the practical function of sociological theory, treated sociology as "social

engineering" or "social medicine", which emphasizes the transformation of the

role of sociology on the social reality. It emphasizes on the research of social

order, social balance and social stability. It has a fairly conservative value

orientation on political and ideological distinction. (Williams, 2003)

The reason why the research selects positivist

Firstly, this research uses questionnaire to collect data. The questionnaire

consists of closed questions and the research presents the data by statistics.

The data is quantitative and it is easy to analyse the data easily and directly.

So it is right to choose positivist as the research philosophy.

Secondly, because Camte said that in order to gain empirical knowledge, he

suggests people need to use four ways: observation, experiment, comparison

and history. (Hughes & Sharrock, 1997) This research needs these ways to

complete the analysis and the results will be represented very well. The

essential principle within these methods is to insist unified science. This

philosophy lets the research become more fair and scientific.


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Thirdly, the research question is how VAT influences ICB students demand in

their daily life. Therefore the questions in the questionnaire are more close to

real life. For example, are you concerned about the VAT on shop receipts? Do

you have a monthly budget for clothing? Would you give up smoking if there

was another increase in VAT? When the students do the questionnaire, they

need to use their experience to answer these questions. This method is just

right for positivist, because the theory of positivist is to use observation or

sensory experience to work out results. The students all have different

situation and their financial situation is different with each other. So the result

of questionnaire will present actual data and accurate information.

Methodology

This research was conducted by questionnaire and investigated ICB

undergraduate student volunteers who study FD Accounting & Finance in CCP.

Questionnaire can be used for descriptive or explanatory research. (Saunders,

2009)To achieve the objective of the research, the questionnaire need

designed by the following step by this research group.

Sampling

Researchers often cannot make direct observations of every individual in

population. Therefore the sample can help to evaluate the module. The

sampling is the process that picks up a small group from the population to

estimate the whole big group. (Bryman, 2012).

A total 50 (27 Females, 23 Males) of sample (considering the sample bias, the

sample random picked by the name list in excel) of the candidate has been

asked finishing the questionnaire have been given. This sample is measured

by sample size calculator (Creative Research Systems, 2012), which can

achieve 95% confidence level.

Question Design

To design the question, first, it needs to identify the themes of this research.


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This research includes 12 questions which are committed to understanding

students basic daily life from shopping, eating, social activity, hobbies and

concept of VAT. The question not only to give the result, but it also makes the

candidate pay attention to their budget.

Question bank is the way that can improve the research question. It is like a

mind map. It includes the entire relative ideas that help to develop the research

question (see in the Appendix). On the other hand it can help to avoid bias

when you research.

Closed question

It is the question that provides a number of alternative answers from which the

respondent is instructed to choose.

It is easy to process answers.

Closed question enhance the comparability of answers.

Closed questions are easy for interviewers respondents to complete.

Reduce the possibility of variable of the answer.

The questionnaire is involved 12 multiple-choice questions. It is short time for

the respondent to answer. The same question can help in the analysis to see

the different between each respondent view. In addition, there will not many

variable answers. (Creswell, 2009)

Questions type

The question type can be as follow:

Personal factual question- personal information- age, gender, how often

behaviors. (see the question number 3, 6, 7 in Appendix)

Question about knowledge. To ask some basic knowledge about VAT

which reflect if respondents concern or not on VAT.

Question about believes. Believes can be whether respondent will change

the buying luxury goods or not.

Question about attitudes. The attitudes can be whether or not the

respondents pay attention to the VAT on the receipt.

The design of each question should be determined by the data you need to


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collect. Therefore, the different type question need involved to help get range

of information. (Wilson, 2010)

General principles when writing questions

-Avoid leading question. Leading question is that prompts or encourages the

desired answer. E.g. Wouldnt you say that, Isnt it fair to say

-Be specific. The word in the question need write more specific to avoid

ambiguous, for example, locally as every ones ideas of what is local will be

different. The question has been corrected by the last draft. (See in the First

Draft in the Appendix II)

-Ensure options are mutually exclusive. For example, if the question asks the

times, the option should be: 0-5, 6-10, 11+ not 0-5, 5-10, 10+. (See in the

Draft in the Appendix II)

-Keep the question as short and straightforward as possible. By this way, the

question can avoid confusion and save times.

(Walliman, 2006)

Order of the question

The order of the question is considering the sequence of the question. There

are three important reason of order.

Firstly, the earlier point question can affect the answer supplied at last stage.

Secondly, put the easier and straightforward question at the beginning. When

the respondent faces the complex one at the start of the questionnaire, it will

deter them to continuing. Finally, the later question which is more sensitive can

predicate the answer at the earlier one. (Denscombe, 2007)

The length

The questionnaire, in general, has between 4 A4 pages have been acceptable

for self-administered questionnaires. The too much question would loss the

patient of respondents. In this research, the questionnaire is double side print.

It is easy way to collection and minimized respondent loss the paper. The too

longer questionnaire may include unnecessary question relate to you

objectives.


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Title and introduction

The questionnaires always have a title and an introduction. These help to

explain clearly and concisely why you want the respondent to complete the

survey. The better explanation, the higher response rate will get.

Dillman (2007) suggests that in the covering letter you include:

-Clear unbiased titles which convey the topic and make it sound interesting.

(The title is Questionnaire about the increase in VAT and the brief

introduction under the title).

-A natural graphic illustration or logo to add interesting and set the

questionnaire apart. (The questionnaire has a flower frame.)

Pilot testing and assessing validity

The purpose of pilot test is to refine the questionnaire so that respondents will

have no problem in answering the questions.

Bell (2005) suggests that you should use this to find out:

How long the questionnaire could be completed.

If any ambiguous questions.

Missing any major topics.

Delivery and collection questionnaires

The questionnaire involves 12 closed questions on 2 A4 pages (Double side

print). All the questionnaire gives after the final draft corrected by lecturer

Sharon on 27th March 2012 and collect after 3 days before the 30th March.

The questionnaire is hand out and collected by five responsible collections in

each group (Green, Yellow, Blue, Red, Amber, exclude Black).


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Data presentation

This is the gender consist of the students participating this research,

meanwhile, 54% of total students are female, 46% of that are male.

Here is the age distribution of participators in this research. 20 year-old

becomes the largest pie (46%), and 18 year-old is the smallest group.

46%

54%

Gander

Male

Female

2%10%

46%

32%

6% 4%Age

18

19

20

21

22

23


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The question 1

Are you concerned about the VAT on shops receipts?

40% students claim that they concerned, but there are still 24% students who

never care about the receipts.

The question 2

Are you clear about which products including VAT?

Only a few (4%) students very clear about the VAT on products, the students

who clear the VAT and that who are not sure are 44% and 52% respectively.

0%

5%

10%

15%

20%

25%

30%

35%

40%

24%

20%

40%

16%

Never

Seldom

Sometimes

Usually

0% 20% 40% 60%

4%

44%

52%

Not sure

Clear

Very clear


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The question 3

How often do you go shopping for luxury clothes?

It is easy to find the top; 22 participators choice the option other (most of

them never or once a year buy luxury clothes). Meanwhile, the trough is also

obvious; only 2 people go shopping for luxury clothes once a week.

The question 4

Do you have a monthly budget for clothing?

Most of participators (68%) have the monthly budget which are less than 40

for clothing. However, a few (8%) get a budget with more than 80.

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

4%

32%

20%

44%

Once a week

Once a month

Twice to three timesper month

Other

0%

20%

40%

60%

80%

100%

32%

36%

24%

8%

More than80

40 -80

20 -40

Less than20


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The question 5

Have you bought any goods (from the list below) from the Internet? (Please

tick all the applies)

26 participators enjoy on-line shopping with buying cloth and shoes. 10

students show no interests on on-line shopping or they buy other products.

The question 6

How often do you go to a restaurant, instead of cooking at home?

Going to a restaurant seem to be popular among the participators. The

frequencies over sometimes are chosen by 80% students.

Food

Cloth &shoes

Electronic

SportsLuxury

Others

0

5

10

15

20

25

30

4

26

16

8

2

10

Food

Cloth &shoes

Electronic

Sports

Luxury

Others

0% 20% 40% 60% 80% 100%

20% 40% 40%SeldomSometimes

Usually


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The question 7

How often do you socialize with your friends?

The graph tells a story that 96% participators choose socialise with their

friends in that the frequency at least is sometimes.

The question 8

Do you save money for purchasing your favourite goods?

It is quite clear to figure out that 64% participators stand on the position of

agreement. Only 20% students disagree or strongly disagree this question.

0%

100%

Seldom

Sometimes

Usually

4%

52%44%

8%64%

8%16%

4%0%

10%

20%

30%

40%

50%

60%

70%Strongly Agree

Agree

NeitherDisagree

Stronglydisagree


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The question 9

Do you buy your favourite brand products and ignore the price?

68% students deliver the information that they can support their favour without

the consideration of price.

The question 10

If VAT increases, would you continue to buy high VAT products?

In this question, people show different attitude towards high VAT products. The

people who choose the options disagree, neither and agree is 32%, 32%

and 28% respectively.

8%60%

16%12%

4%0%

10%

20%

30%

40%

50%

60%

70%Strongly Agree

Agree

NeitherDisagree

Stronglydisagree

4%28%

32%32%

4%0%

5%

10%

15%

20%

25%

30%

35%Strongly Agree

Agree

NeitherDisagree

Stronglydisagree


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The question 11

Do you ever buy goods in bulk, due to the price?

72% participators (8%strongly agree and 64% agree) are interesting in the

bulk bought, only a few people (16%disagree and 4% strongly disagree) claim

that they would not be attracted by the price.

The question 12

Do you smoke?

In this research, 84% participators claim that they do not smoke, and 16%

students are smokers.

8%

64%

8%

16%

4%0%

10%

20%

30%

40%

50%

60%

70%

StronglyAgree

Agree Neither Disagree Stronglydisagree

16%

84%

Yes

No


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The additional information for question 12

If yes, would you give up smoking if there was another increase in VAT?

In this research, 62.5% smoking participators would not give up smoking, due

to the increase of VAT. However, nobody consider about stopping smoking.

Data analysis

Inferential statistics allow you to infer how likely it is that your findings are the

result of nothing more than random chance (Rugg & Petre, 2006). That is the

reason why the inferential statistics will be applied in the analysis of this

research. However, based on the limited level of the knowledge, descriptive

statistics will also be applied.

The hypothesis of this research is that VAT can influence ICB students daily

life. There are 50 foundation degree students involving in this research, 23

participators are male and 27participators are female. The differentiation of

number is not significant. Meanwhile, the distribution of participators age

covers all range of ICB foundation degree students.

The 1st and 2nd questions are in order to test the participators knowledge on

VAT. The result shows that more than half of participators do not care about the

0.0%0.0%

37.5%37.5%

25.0%0.0%

10.0%

20.0%

30.0%

40.0%

Stronglyagree

Agree

NeitherDisagree

Stronglydisagree


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VAT in daily life.

Then the next 10 questions are designed, due to 2 main elements in daily life

clothes and eating. While, in order to exclude personal factors, there are some

questions designed.

Buying clothes & shoes Yes No Total

Female 18 5 23

Male 6 21 27

Total 24 26 50

In the question 5, it is not hard to figure out the result that female are more

likely to buy clothes and shoes on-line, comparing with male.

Monthly budget for

clothing

Less

than

20

20 -40

40 -80

More

than

80Total

Female 10 6 5 2 23

Male 6 12 7 2 27

Total 16 18 12 4 50

However, comparing the result of question 4, there is no evidence to show that

female spends more money on clothing.

The attitude to bulk

purchase

Strongly

agreeAgree Neither Disagree

Strongly

disagreeTotal

Female 4 11 3 3 2 23

Male 21 1 5 27

Total 4 32 4 8 2 50

In the question 11, the number tells a story about how female save their money

through bulk purchase.

Here is a little test for question 3 and question 4.


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Chi-Square Tests

Value df

Asymp. Sig.

(2-sided)

Pearson Chi-Square 29.437a

9 .001

Likelihood Ratio 37.190 9 .000

Linear-by-Linear

Association

3.585 1 .058

N of Valid Cases 50

a. 11 cells (68.8%) have expected count less than 5. The minimum

expected count is .16.

The Chi Square Tests show that question 3 has relationship with question 4.

In other words, the spending abilities of participators have the relationship with

their monthly budget on clothes.

The next test is for eating, the test group is question 6 and question 7.Correlations

Question 6 Question 7

Question 6 Pearson Correlation 1 .520**

Sig. (2-tailed) .000

N 50 50

Question 7 Pearson Correlation .520

**

1

Sig. (2-tailed) .000

N 50 50

**. Correlation is significant at the 0.01 level (2-tailed).

It is easy to find the result show that the correlation between question 6 and

question 7 is strong (0.8>Correlation > 0.3). Besides, he graphs of question 6

and question 7 also demonstrate the trend. It tells a story that going out forfood has some relationship with socialization with friends.


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The final test group is question 8 and question 9.

ANOVAb

Model Sum of Squares df Mean Square F Sig.

1 Regression .901 1 .901 .912 .344a

Residual 47.419 48 .988

Total 48.320 49

a. Predictors: (Constant), Question 9

b. Dependent Variable: Question 8

Coefficientsa

Model

Unstandardized Coefficients

Standardized

Coefficients

t Sig.B Std. Error Beta

1 (Constant) 2.092 .390 5.358 .000

Question 9 .143 .149 .137 .955 .344

a. Dependent Variable: Question 8

The significant level is higher than 0.05, so it has sufficient reason to believe

that the question 8 and question 9 has relationship. Personal preferences may

drive the participators to ignore the money.

The last question is about smoking, this question is for investigating the

influence of personal preferences. The question is if increasing VAT on

cigarettes would force people to stop smoking. The graph displays a clear

answer for the question. Nobody choose the options of Agree and Strongly

agree, only 25% of them have no idea about if they should give up smoking.

Most of them choose to ignore that part of tax.

The question 10 seems to be an indirect answer for the whole research. The

attitudes towards increasing VAT seem to be in the equal position. Three main


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attitudes occupy one third pie.

The influence of VAT to ICB students does not seem to be significant enough.

The hypothesis is rejected.

Problem

The first problem in this research is sending the questionnaires. During the

time of sending questionnaires, it is hard to send the questionnaires with

investigators own hand. The common way is requesting their friends to ensure

that every questionnaire will be back. However, participators cannot make sure

that they only write one questionnaire for one group. There are some reasons

leading to the problem. The sending of questionnaires is continuous for several

days, while participators must do a lot of questionnaires during the period,

sometimes they cannot remember if they do the questionnaire before.

The second problem is empty answer for some multiple choices. The pressure

of finishing a large sum of questionnaires may result in the missing observation

of some questions.

The third problem is designing the questionnaire. Designing a questionnaire is

not only about the questions themselves but also about the orientation of

whole questionnaire. A well-designed questionnaire may encourage people to

participate and decrease the rate of missing questions.

The fourth problem is time. Time limits the quality of the research. During the

data collecting, it is easy to find some answer apparently without logic.

Conclusion

The aim and the objective of this research is basically reached, because

through the analysis of data, the it is clear to figure out what kind of role the

VAT factor plays in the daily life of ICBs students. Three elements influencing

the ICB students attitude to VAT have been found out; they are economic


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capability, friends and personal preference.

However, the hypothesis is rejected; the influence of VAT does not seem to be

significant to the participators. The three factors are big enough to influence

the result.

Due to the research of Owens, Battiau and Charlet (2011), the influence of VAT

is slight among the middle class. However, according to the Tax Research

UKs current research (2010), the poorest people would not benefit from

increase of VAT. Considering with the economic capability of ICB students,

VAT would not be the big problem for their daily life.

Recommendation

Positivist is a good philosophy to apply to the research. It is accurate and easy

to understand. Researchers can use their own experience to analyse their

topic and apply science to research.

It is seems that many condition force to limited the research only conduct a

small group. Although the results in this time present the research question,

there are many things to develop in next time.

The first thing is to think about the population and research in a bigger group.

At the beginning, the research is face to the whole UK residence. The time and

information was not allowed to access to evaluate the sample. As the result,

the research changed to the student where the information is easier to get.

Furthermore, the design of each question should be determined by the data

you need to collect. Therefore, the different type question need involved to

help get range of information (Wilson, 2010) . At this time the research is

collecting the quantitative data so that closed question which can reduce the

possibility of variable of the answer (Creswell, 2009). If the research wants to

find out more depth information, at next time, the research can be involved

open-end questions. Next, the research group needs to refine the questions.

The reason is some questions make candidate confused. The researchers


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have to avoid ambiguous subjects. According to Bell (2005), the ambiguous

questions like regularly that every respondent can introduce their own idea.

Finally, the handout method can change as e-mail, by this way the collection

could be more convenience and faster (Creswell, 2009).


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