UK VAT Reduction - 17.5% > 15%
- Started
- Last post
- 35 Responses
- olli101
<rant>
I don't think any one of these idiotic politicans realized how annoyingly difficult this would be.For an agency, we need to change the prices on EVERY SINGLE e-commerce site in both the creative and the back-end to reflect this, completely screwing already tight projects that are all due before the Christmas holiday begins.
We are not amused.
</rant>
- Nairn0
hack.
- ian0
So hang on. The UK is reducing its VAT and you're complaining?
In Ireland we're getting a VAT increase on Jan 1st plus an increase in tax on earnings. Bloody moaners.
- Dancer0
I'm with moth here:
moth:
"Every poorly developed website will run into problems I expect.":p
- maximillion_0
easy solution: increase yr prices by 2.5% and do nothing
- because that is not mathematically correct?mimeartist_com
- 17.5 down to 15. reduction in 2.5. so for consumer prices its finemaximillion_
- graham0
wtf you didnt set the VAT rate as a variable??
- mimeartist_com0
yeah, a pain in the arse changing percentage from 17.5 to 15
- Laurent0
Decided by politicians....without thinking of the repercussions on business hassle....aw what a great idea!!!!!
Tills - ebusiness....politicians not only stirring the shit of this crisis but acting the wrong way....£29.99 with 17.5 or 15%.....who cares...a few pennies...but also the manufacturers a increasing the cost price by 15% from Monday....so, utterly pointless.
- emecks0
It only becomes a bitch if you quote prices excluding VAT.
If your products / services include VAT all you need to do change the fraction of 7/47 to 3/23 - every business that is VAT registered in the UK has been sent a letter on this from HMRC.
Where it is a nightmare is for ongoing services, particularly if you take payment in advance.
- mimeartist_com0
surely that is the other way around? if you quote price without VAt, then they are the same prices? or am i gettttttttttttttttttttttttttting confused?
- correct cost price at £1 ex vat stays the same unless manufacturers increase itLaurent
- you're confused.com both of you.emecks
- read the letter you got from HMRC - it's very straightforward.emecks
- emecks0
^ An example.
Today:
You buy a TV for £400 on the highstreet - the £400 already includes VAT @ 17.5% (£59.58)From Monday:
You buy the same TV for £400 on the highstreet - the £400 already includes VAT @ 15% (£52.17)The customer still pays the same.
Where it gets difficult is in this scenario:
You run a hotel, a guest is staying from today until Friday next week and has paid in advance. The price they've been charged was £100 per night excluding VAT. Now that is tough.- of course....Laurent
- the tv won't be 400 quid it will be £340.43p + VAT which will be £391.49mimeartist_com
- unless increase of ex vat price...Laurent
- You really believe it's going to get passed on to the consumer?? The price will remain the same.emecks
- WRONG... check the newspapermimeartist_com
- mimeartist_com0
do you know the difference between excluding and including? you're only going to run into problems if you're seeking to gain from the VAT drop which the whole point of it in the first place is to give relief to the consumer
- Laurent0
lets do a VAT exercise....no no only joking...
- emecks0
It would be naive to think your mars bar is going to get any cheaper. It will cost the consumer EXACTLY what it always has, the difference is that the corner shop owner no longer needs to give HMRC 17.5% of the price he sells it for, but only 15%.
It's essentially a tax break for small businesses who sell to consumers. B2B will be affected as their prices are, generally speaking, exclusive of VAT.
- mimeartist_com0
the clue is in the frigging name... Value Added Tax... if your product is X amount... the tax is based on the value... if you start increasing the value of your product to compensate, then there was no point reducing it, and you'll still not encourage anyone to buy your stuff
(not that 2.5% is going to make a big difference really as to whether you'll buy something!)
- Laurent0
Emeck > we had 2 mails from Canon and Tamrac and Pentax that price (cost price = Net Net) will go up from December 1st for some and January for others.
So, the VAT thing is rather inexistant for the customer.....or i am incorrect on that bit?- VAT will drop but cost will go upLaurent
- that's exactly what I'm saying. The consumer will not profit - only VAT registered companies will.emecks
- precisely, the incl. VAT price will not change. just the VAT portion of it will get smaller.emecks
- WRONG, unless you're a snake!mimeartist_com
- your groceries will not change a penny in price - no way.emecks
- emecks0
^Agreed James,
The simple point is in consumer retail the price is almost never £100 + VAT. It is £117.5 (which includes VAT)
Will retailers all drop their prices to reflect the VAT reduction? No way will they do that.
My products and services are all exclusive of VAT and B2B so no, I will not be "trying to gain".
- mimeartist_com0
yeah but retail doesn't work like that, and agreed unless you don't earn over 60k or whatever you won't need to do it... plus you'll find both a lot of retail strange prices for big items to show VAT is reduced, but also companies reducing their pre-VAT price... so that the inc VAT price will be all nice and 49.99 or whatever
- emecks0
Perhaps :)
I'm just a bit cynical maybe. Like I said my pricing is excl. VAT so non VAT registered clients will actually pay less whilst VAT registered clients will pay exactly the same (once they get their VAT back from the HMRC)
On a tangent, do you know why prices ending with 99p started??
- mimeartist_com0
yes, it was so that the price had to be put through the till, rather than the till operator 'coining' it in :)
- sorry to be a smart arse :)mimeartist_com
- Most people think it is because it looks like less, but you're right :)emecks