New VAT Calculation?

StaffsSW

Hintza wrote: »

However I can see prices being squeezed down by lack of demand.

I agree, I wont be dropping prices either, but isn't lower prices simply a typical sign of a depressed economy though?!
Nothing to do with a VAT rate, just supply, demand, and desireability!

To kick start an economy, there needs to be more money in the buying publics' pockets, not just cheaper (or theoretically cheaper) prices.

Besides, falling prices stifles economic growth, making the long term problem worse.

Hintza

My biggest problem is that prices from my suppliers are up and yet the prices I receive are down so I'm getting very squeezed, I am also being ultra catious in stock levels as I suspect after Christmas you might not be able to give it away.

I am old enough to have seen how bad it got in the early 70's (remember the lights going out!!) and I honestly think this is going to be a lot worse. After Christmas a lot of jobs are going to go and I can just see the whole thing snowballing.

As for the government bailing out these interest rate tarts with money in Iceland that is just a joke. Six months ago anyone with a modicum of intelligence and awareness knew Iceland was about to go belly up, which makes the local authorities even more culpable.

The country is almost bankrupt at this point in time and I can see us needing an IMF bailout if we are not very careful.

custardy

this was exactly my arguments at work today about the VAT situation
i wonder if reducing/removing stamp duty coupled with a cut in basic income tax would have been better
giving people more 'real' money in there pocket and perhaps getting the housing market moving

soolin

I do remember the 70s Hintza and this is making me quite gloomy at the moment. I particularly remember as a child the days with no electricity due to strikes over pay and cost of living and sitting in a dark cold house with mum and dad waiting for the electric to go back on. I've never been without a box of candles and a match in every house I have owned since.

The headlines on the early editions of the London Standard are house prices fall again.

custardy

i would hope few are surprised house prices are falling
theres no way the prices could have continued to rise as they were

JCS1

soolin wrote: »

Some people are falling for it though. A lady at the gym this morning was planning on taking back her £7.99 Argos kettle bought yesterday as she says she will re buy it on Monday and save herself quite a bit

Edit. That's why I posted my earlier post, she believes she is going to get back 2.5% on the total.

Asuming Argos keep the net price the same, she would save 17pence.

Hardly worth the time or effort.

soolin

JCS1 wrote: »

Asuming Argos keep the net price the same, she would save 17pence.

Hardly worth the time or effort.

Nope, you've made the mistake that we are discussing above and have taken 2.5% off the total item cost before VAT is added.

A simple sum to prove this is £8 x 2.5% is 20p, therefore a 2.5% reduction in the VAT element alone which is a percentage of the £8 cannot be anything like that.

Someone please tell me I have done that right! I thought I was clear about VAT (and in my defence I don't have a calculator to hand) but writing it down I've suddenly doubted my own understanding.

Brooker_Dave

stevew8975 wrote: »

I agree, I wont be dropping prices either, but isn't lower prices simply a typical sign of a depressed economy though?!
Nothing to do with a VAT rate, just supply, demand, and desireability!

To kick start an economy, there needs to be more money in the buying publics' pockets, not just cheaper (or theoretically cheaper) prices.

Besides, falling prices stifles economic growth, making the long term problem worse.

Medium sized ebay sellers might be in for a tough time, all trying to be the cheapest, fewer buyers and if ebays revenues fall they may well increase fees to cover...

rosysparkle

7.99 kettle inc 17.5% VAT £6.80 net plus £1.19 VAT

£6.80 kettle net (assuming the net price stays the same) with 15% VAT £7.82

Potential saving to customer 17p

hula-hoops

Did anyone hear the phone-in on radio 2 where one woman had the best solution of all.

Instead of bailing out the banks (the day after Lloyds TSB was helped by the taxpayer my local branch put up a notice saying they were closing for 3 weeks for a re-fit - it all looks very nice now but I can't help but think that if you are struggling to survive then doing up your place is hardly a priority...) the government should give every adult in the country £40,000.

Those with a lot of debt would pay off their debts (I know I would!) and use what is left to treat themselves or put into savings. Those with no debts would either go on a spending spree or put it into a savings account. In each case the banks are re-paid, the shops have a boom and the economy is kick-started.

I have changed my account from the Lloyds TSB now after begging for money and then totally re-fitting all of the branches. It wasn't just new carpets and chairs, it was a total re-design.

Straying off the ebay topic here but it is connected with the VAT issue.

I don't think retailers or ebay sellers will be passing on the saving to a customer - there is no obligation to. Darling has 'urged' them to but that's all. The cost of changing all the prices in a shop and the tills, etc will not warrant the saving made.