VAT

[the voice]

The price announced was £39.99 so should now be £39.14, however I guess the club will just increase there margin rather than pass on the reduction of VAT. Not right IMO but I would guess this will be the same in a lot of businesses, I bet if you went into B&Q for example today and priced something you knew the price of last week it will not have changed. Think this will be the same in other places too.

Over time it will change but the cost of repricing everything on the shelf would simply cost more than the money that is being knocked of it (unless a significant amount).

I bought my paper today and still the same price it was last Friday when really should have been 1p less. Has petrol dropped this morning to account for the reduction in VAT?

Was in B&Q today they reduced a price of £1 78 to £1 74 for me on an item!!

[Jon]

Well well so in effect we are really no better off then last week with the drop in VAT. Figures eh, no government gives you anything for nothing. 

This might be off topic, but...

The fact is the majority will be worse off.  Businesses could reclaim the VAT while they can't reclaim any duty, thus making the business less profitable and risking more job losses.

Cheers
Jon

[Stevie]

Was in B&Q today they reduced a price of £1 78 to £1 74 for me on an item!!

Have you decided how you are going to invest the saving yet???

[the voice]

Have you decided how you are going to invest the saving yet???

Taking advise as we speak!!

[martin]

The idea of the reduction in vat was to make some commodities cheaper like building materials, tv's etc not food. The idea was for people to go and buy and stop people been made redundant. As for the reduction in the shirt the club HAS to reduce it however if you want to pay the extra there is nothing stopping you donating it

[Steve]

I've just been Tesco and spent £65 - on my receipt it tells me I saved 15p.

That'll be a finger of fudge!

So here Mr Darling....have this finger from me!


VAT cut will cost shop owners more in labelling than it is worth, relabelling costs will need to be passed on somehow!
MAKES MY BLOOD BOIL!

[DJones]

As for the reduction in the shirt the club HAS to reduce it however if you want to pay the extra there is nothing stopping you donating it

As far as I'm aware, businesses don't have a legal requirement to reduce the price of goods, they sell at retail price, all they're required to do is pay the vat at 15% over to HMRC.  They can keep the extra themselves.  A lot of restaurants, takeaways etc have already said they won't being reducing prices because it would cost them too much to reprint menu's and price lists.

I'd expect most of the big shops to pass the saving on (as the supermarkets are doing), but for small businesses, its quite likely to be uneconomic to make the price changes.

[Rafe Wrench]

Interesting question.

Also affects the price of season tickets as well.

Ah...I wondered if I'd ever get to talk about my professional interest on here!!

The difference in VAT is 74p (ie the difference between 7/47ths and 3/23rds). Ticket prices (and indeed admissions) will include VAT at 15% from yesterday, but if you paid in advance you will have paid at 17.5% (which I'm sure the club will already have remitted to HMRC...). Now, here's the thing. If you take the view that you have paid in advance for a service which will not be delivered until after 1 December 2008 then the supplier can elect to account for only 15% but must then credit note the difference to the customer. But if what you have bought is a right (ie of admission), then the VAT will indeed be 17.5%

TBH retailers are being forced to discount like hell as it is - 20,30,50% off in some cases, so who will feel the benefit of a small reduction in VAT I don't know. Beer retailers and restaurateurs etc have generally had their Christmas menu prices printed up already and will therefore just hang onto the difference for the most part. And don't forget beer and fuel duty is a permanant increase, the VAT reduction is only temporary. My forecast is that VAT will increase to 20% because of the chasm that will exist in the public finances by the end of next year. That was the reason why Norman Lamont had to put it up from 15% to 17.5% in 1991, in the middle of the last recession.

[manxviking]

Correct - Plus National Insurance is going up 0.5% too. In one hand slowly and fast out of the other!

Worse - NI is a tax on employment. Employers' NI will be going up making it harder to employ people once the wrost of the depression is over. The VAT reduction will have negligible affect unless you are buying big ticket items. If I was a retailer, I'd be keeping prices the same and increasing the margin anyway.

[cheadleviking]

Worse - NI is a tax on employment. Employers' NI will be going up making it harder to employ people once the wrost of the depression is over. The VAT reduction will have negligible affect unless you are buying big ticket items. If I was a retailer, I'd be keeping prices the same and increasing the margin anyway.

]

First time i have heard it called this, hopefully it wont get that bad.  My hope is everyone will finish for christmas get absolutly plastered and forget about work and the worries of 2008 come the 1st Jan 09 they will be getting ready to go back nursing a sore head, return to work thinking spangles what was that nonsense last year all about!!! Heres hoping!! Heres hoping I have a job in the new year!!

I know from er indoors family business (bathrooms) that 2% is a lot of money although people are and have been asking for the past 5 months for "extra discount due to the credit crunch" I quote and with sales already starting prices are down 20-40% therfore 2% on a £7k is small fry to the 20-40% already deducted.