The VAT Nightmare After Christmas...

[gyzmo]

The Government's reduction of the VAT rate from 17.5% to 15% is set to expire on New Years Eve, at which point it will revert back to 17.5%.

 

Yes, it is completely bonkers. The timing is insane.

 

Not only will it (again) cost the industry millions in putting their tills back and repricing all stock, but it will cause havoc with sales.

 

We have a problem with sale prices as it is, as the legislation governing them is now too subjective. With costs automatically increasing at new year, it will be even worse for people trying to compare a previous price at one VAT rate with a "now" price at a different VAT rate.

 

And will sellers increase prices by the proper rate, or will we see profiteering going on - i.e, sellers using it as an excuse to increase prices by more than the increase in VAT?

 

Lets hope the government, for once, demonstrates some common sense and delays the increase for a while.

If not, you have been warned.

[Conniff]

Perhaps they planned it this way as the January sales will be starting then and the buying public

won't notice that it has gone up by 2½%.

[gyzmo]

Not to be fickle, but I don't think the price increases by 2.5% - we had all this when they went down!

 

But it's estimated that the taxman is £1 billion short in terms of the reduction of VAT.

 

How much will businesses make when they increase the price by an amount greater than the VAT increase rate? A good few pennies, methinks.

[gyzmo]

Oh and you can bet they will all have the prices increased right on time, and not a few weeks later like they did when the VAT was reduced!