Just curious: do you see the effect of the lower VAT on the site's of your suppliers? I don't see much difference compared to a week ago and wonder who it is supposed to help out...
Vat
- Thread starter Mastino
- Start date
Without getting into the politics side of things don't forget this will only reduce things by about 2p in the pound.
So an item costing £5.00 last week, in theory, should cost £4.89 today.
my guess is that lots of smaller shops wont change thier priceing becuase it costs them time and effort for no benefit to themselves...
So the short answer is you wont see much benfit anyway - unless you're buying something like a new car which could be a couple of hundred less.
Sorry about that!
Mark
So an item costing £5.00 last week, in theory, should cost £4.89 today.
my guess is that lots of smaller shops wont change thier priceing becuase it costs them time and effort for no benefit to themselves...
So the short answer is you wont see much benfit anyway - unless you're buying something like a new car which could be a couple of hundred less.
Sorry about that!
Mark
Yeah, it's not a lot, I changed the % on the shop today and things were a bit cheaper but not a lot, the jackets went down £4 something.
The reality is also that a lot of pricing is targetted gross and the VAT worked out backwards - so something 4.99 is likely to remain at 4.99. It's only the really expensive goods where you'll see any difference.
The big winners on this will be organisations such as your local council, though I don't imagine I'll see any change in my council tax as a result.
The big winners on this will be organisations such as your local council, though I don't imagine I'll see any change in my council tax as a result.
I guess a lot of suppliers who have just bought all their stock at 17.5% will wait until that stock has sold before reducing thier prices... Only fair i suppose
As I'm aware that would be illegal as they are charging a tax collectable by government, anyway, if they are charging tax, the tax they have payed will be reclaimed!
Not having a go
just had a cold shiver remebering having to fill in the VAT return brrr
I'm no accountant (Thank God!) but I don't think VAT works like that. I think it is the final selling price that dictates the amount of VAT paid at each stage of the process. So they should be knocking off my 2p in the £.
If you charge VAT then you are VAT registered. Your suppliers charge you VAT - you claim that back from HMC&E at the same time you pay them the VAT you've charged selling things to your customers.
If you're making money you should owe HMC&E money with your return cause you've made more than you've spent - if they owe you money you're not long for this world!
If you're making money you should owe HMC&E money with your return cause you've made more than you've spent - if they owe you money you're not long for this world!
Nope, wouldn't be illegal at all. The retailer can charge you anything they want (with a few specific exemptions around price controlled products) - provided they pass the correct proportion to the tax man and show the correct vat amount and rate. There is no obligation on the retailer to reduce the selling price of the goods if a VAT change occurs.
Your observation on the recouping of VAT in a subsequent post is correct (other than for those VAT registered companies who operate the "flat rate" scheme whereby the only pay a proportion of the VAT they charge to HMCE but cannot claim back any of the VAT on goods purchased)
Short story long, retailers can charge anything they like and are not obliged to pass on the VAT cut to the customer by reducing their selling price. Indeed its costing many retailers far more to reduce thousands of prices in dozens of systems (and in some cases millions of catalogues etc.) than the customer will ever save.
Now if they had cut the basic rate of income tax it would have gone to the taxpayer directly and been much simpler to adminster.
Red
Yes, thats as I understood VAT legislation in my previous role as Corporate Financial Director, but thank you for your detailed clarification. What I understood from the initial statement...
I guess a lot of suppliers who have just bought all their stock at 17.5% will wait until that stock has sold before reducing thier prices... Only fair i suppose
...was that it was assumed companies would continue to charge VAT at 17.5%, not that they would continue to charge the same gross price by inflating their net price which of course is perfectly legal if a little despicable and, as they would not be out of pocket, not particularly fair IMO.
I guess a lot of suppliers who have just bought all their stock at 17.5% will wait until that stock has sold before reducing thier prices... Only fair i suppose
...was that it was assumed companies would continue to charge VAT at 17.5%, not that they would continue to charge the same gross price by inflating their net price which of course is perfectly legal if a little despicable and, as they would not be out of pocket, not particularly fair IMO.
Hey, apologies if that was a bit sharp - didn't mean it to be - it was just as it fell out of my head!
No worries - just want people to realise that there is no obligation on companies to pass it on. As for being despicable - I see the point as moot - many companies have already printed all their shelf edge, fliers, catalogues etc. for peak trading. Why should they lose millions of pounds re-printing all of them (often costing them more than the saving they pass on).
I think it was a pretty dumb way to pass on a "fiscal stimulus" - there are far simpler ways to give money bax to tax payers. However we stray into politics there.
Red
I think it was a pretty dumb way to pass on a "fiscal stimulus" - there are far simpler ways to give money bax to tax payers. However we stray into politics there.
Red
No mate, it was snotty, sorry! I have a h8ll of a headache, and the subject reminded me of aa bad time in my life - still sorry.
As to what you said about overheads - a very good point - and as to it's value a purpose - silly idea!
Apologies again,
Andy
As to what you said about overheads - a very good point - and as to it's value a purpose - silly idea!
Apologies again,
Andy
Surely if a company sells goods on/ after 1st Dec they charge 15% regardless of when they were bought.
Yes there's a diference on VAT rates for purchases/ sales but that gets sorted out on thier quarterly return to HMRC
I'm not at all surprised people aren't passing it on - far too much hassle for no benefit. Not convinced it's despicable either. As had been said there are a lot of costs incurred already and it's not as if the govt gave a huge amount of notice of the change so companies could plan!
Mark
As said earlier in the thread, a danger of straying into politics, but with a saving of the price of a pint of beer if I spend £100 I hardly see that is going to encourage me to go spending loads of money.
And if I put on my Grumpy Old Man hat, there are too many (IMHO) unnecessary things to spend money on nowadays. I'd much prefer it if people were spending money to buy locally grown produce (and therefore help to develop local sustainability) rather than the latest mobile phone from the Far East. Of course, my view of a world where we are content with what we have and not continually seeking more may be very simplistic and an economist would probably shoot me down in flames.
Geoff
And if I put on my Grumpy Old Man hat, there are too many (IMHO) unnecessary things to spend money on nowadays. I'd much prefer it if people were spending money to buy locally grown produce (and therefore help to develop local sustainability) rather than the latest mobile phone from the Far East. Of course, my view of a world where we are content with what we have and not continually seeking more may be very simplistic and an economist would probably shoot me down in flames.
Geoff
Well, let them! Since they foresaw 7 of the last 5 recessions correctly, they are entitled to it
What you say is 100% correct, instead of VAT their should be some 'distance tax' promoting local production...
Have heard that some shops are not changing a lot of items prices, because of other costs, so do not think it is going to have a big effect.
Think the sales this year will be interesting.
Think the sales this year will be interesting.
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