% VAT cut?

davetrousers

This might be in the wrong section.

With it rumoured that VAT will be cut from 17.5% to 15%. What % reduction is this? The quick and obvious answer would be 2.5% but I am inclined to say it would be a 14.3% reduction.

It's probably why they often say percentage points

andysstuff_2

Cut in actual prices will be somewhere around 2.12%-something valued at £1.00 currently consists of 85.11p plus 14.89p VAT.

Revised cost will be 97.88P

Yorksblue

davetrousers wrote: »

This might be in the wrong section.

With it rumoured that VAT will be cut from 17.5% to 15%. What % reduction is this? The quick and obvious answer would be 2.5% but I am inclined to say it would be a 14.3% reduction.

It's probably why they often say percentage points

An item costs £100 plus VAT falls from £117.50 to £115.00 a reduction of 2.128%

bockster

is it me?
but would it be worth retailers changing the ticket price on low value items so this cut is passed on to consumers? especially that it may be short term?or will the retailers pocket the extra?

i've got a bit of a feeling that if a cut in vat does happen it may be much more than 2.5%, considering the vastness of sums of money involved in trying to prevent meltdown recently.

Lokolo

bockster wrote: »

is it me?
but would it be worth retailers changing the ticket price on low value items so this cut is passed on to consumers? especially that it may be short term?or will the retailers pocket the extra?

i've got a bit of a feeling that if a cut in vat does happen it may be much more than 2.5%, considering the vastness of sums of money involved in trying to prevent meltdown recently.

I thought that exactly ^^. If my kitkats costs £1.17 with VAT. They aren't going to lower it to £1.15, they will keep it as it is, and take the profit.

Yorksblue

personally i think the saving will not be passed on to customers especially the small value items. Something costing £9.99 for example would come down to £9.77 which I dont think makes it any more appealing to buy. The shop leaves it at £9.99 and pockets the 22p.

Not sure they will be allowed to go below 15% due to Europe.

andysstuff_2

If it goes through, I would like to see ticket prices stay, but the reduction given at the till. Can't se it working any other way, because of the obsession with pricing everything ending in 99p

moneypooh

andysstuff wrote: »

If it goes through, I would like to see ticket prices stay, but the reduction given at the till. Can't se it working any other way, because of the obsession with pricing everything ending in 99p

that would be a potential nightmare though, because not all items carry VAT and so a till discount would mean all things would have the reduction..

swiss69

This cut will just have NO impact at all. A Saving of £2 odd on every £100 spent...Why would anyone go out and spend more money because of this? Its just ridiculous. MP's just haven't got a clue.

Shops having 20% off everything now that does have an impact. Debenhams trafford centre was packed for its recent 4 day sale as was M & S for its 20% sale.

Surely the governement would be better advised giving these large companies tax breaks in return for more sales...

Yorksblue

It it going to make very little difference to the consumer and therefore the economy but will cost business, especially small business who will have to alter all their software etc.

andysstuff_2

moneypooh wrote: »

that would be a potential nightmare though, because not all items carry VAT and so a till discount would mean all things would have the reduction..

It may well be, but is it a bigger nightmare than the cuts not being passed on to consumers? Most stuff is barcoded now anyway, and the till rings up the price from that, so it an't be inpossible.

Businesses must be able to work put how much VAT they have to pay at the moment, and what items are exempt. after all they will only pay the taxman what's due!