VAT reduction
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- johnnnnyh
If it happens (in the UK) will you reduce your prices or will you take the difference and keep it for yourself?
- Doorman0
if it happens it will be mayhem...imagine all online business have either to adjust or refund customers the difference....nightmare
- johnnnnyh0
Yes, I'm sort of thinking there's a couple of invoices I might wait unti I raise them and save my client's a few quid - then again, most of them claim it back anyways.
Madness!
- moth0
Every poorly developed website will run into problems I expect.
- moth0
I think even I might be guilty of hard-coding a few 17.5 in some sites....
- johnnnnyh0
Yes, there's all the issues about price points as well - things being £9.99 now becoming . . . well something else I can't work out at the moment . . .
- Horp0
I get the impression that none of you are actually VAT registered.
You HAVE to adjust the VAT you charge if they reduce it, its not part of your fees.
Nobody would have to refund anyone unless they tried to continue charging 17.5% after the rate change.
ALL Vat gets claimed back by any VAT paying business. VAT is one long game of pass the parcel. You have no choice but to charge it, and you have no choice but to pass it back to HMCustoms. Its only the end cosumer who has to pay VAT and can't reclaim it.
- Actually, now I understand, from Moths post, that you are all on about from an etrade POV, I retract and apologise!!!Horp
- johnnnnyh0
No you don't have to at all. You just charge more for your service. This is the issue that it won't really give any money back to people in the form of less tax. If I charge £10 including VAT I send 17.5% (1.49) to the VAT man, if the rate reduces I send 15% (91p) to the VAt man so I pocket the 2.5% unless I reduce my charges - which in all honesty is unlikely particularly in retail.
- but I can see if a supplier to our business increases their hourly rate before tax... will be a bit obvious!!ribit
- moth0
johnnnnyh is right. I don't believe that as a consumer you're going to see 2.5% discounts, except on very expensive goods.
Businesses however will feel the benefit.
- moth0
But yeah... depending on how a website is structured, this could make a real messy mess.
- mimeartist_com0
that getting 2.5 percent back only really works if you charge people a price including tax... I always put the amount before VAT, and then add the vat on afterwards, as my clients are B2B, so they claim it back anyway.
- moth0
Changing on Monday to 15%.
- Raniator0
It's just happened fella's... better get cracking.
Starts next Monday until the end of next year.
- Horp0
I am back to thinking there's an element of confusion in this thread. You can only charge VAT if you're VAT registered. If you are VAT registered, you have to charge the VAT as a clearly marked VAT addition on top of your fees, not buried in your fees (unless you are selling to end consumers) and it has to be at the prescribed rate.
If you are VAt registered and charging VAt at the prescribed rate, you have to give ALL of that money to HM Customs and exise, not pocket a bit for yourself. This VAT rate reduction is trying to stimulate trade by giving anybody the ability to put the difference in your pocket, its an attempt to shave a bit off the cost of retail.
Maybe I'm still mis-reading soem these posts, but unless we're talking about retailing here I think some fo the comments above are a bit odd.
Apologies for the second time if I am indeed getting the wrong end of the stick.
- mistermik0
"If you are VAt registered and charging VAt at the prescribed rate, you have to give ALL of that money to HM Customs and exise, not pocket a bit for yourself.'
ssssh.
- moth0
Basically Horp, most people calculate it backwards (from say £50 per hour), and will continue to do so.
I know I would.
- do they?mimeartist_com
- i / we don't - never heard of that either, basically hourly rate + 17.5%mistermik
- mimeartist_com0
to me the vat is just an extra headache, i have a daily rate which doesn't really change very often, and then vat on top. As I'm on a flat rate, I'll make slightly less from it, assuming the flat rate payed back to her majesty is lowered or whatever!?!??
- Horp0
^ But that's sheer madness unless I am not understanding you.
Are you saying that (by way of example here)...
as a B2B consultant or supplier, you decide that your hourly rate is £50.00 per hour. And THEN you break that hourly rate down so that a portion of it is your VAT, and the rest is your fee rate?
- moth0
I was using that as an example Horp.
Here's another.
I sell things for £1 in a pound store. Why would I want to suddenly become the 0.975p store?