Which companies are passing on the VAT cut? Discussion

ThinkingOfLinking

HMV no longer offer the VAT discount BUT new releases are being priced at the new VAT rate, eg the Cass DVD is £14.67. They jsut cannot resticker every single item. They also apparently have some other ways to repay customers up their sleeves, eg better deals in the 2 CDs for £10 section, so that should be coming soon.

ThinkingOfLinking

I don't get how the ticket operators, eg venues directly, See Tickets and Ticketmaster, offer VAT discounts on some tickets but not on others?!

alanwrigg

There are a couple of references in the threads to hotels booked before the VAT rate change where the room will be taken at a later date. I am especially interested in Travelodge who, on their website (Help/ General Help/ Your VAT Questions Answered), say the following:
"Your VAT questions answered

How much VAT will I be charged? You will be charged a new rate of 15% on all new bookings made from midnight on Sunday 30 November. All bookings made before this time are subject to the rate of VAT at the time of booking (17.5%). How is my VAT calculated? For pre-pay bookings your VAT is calculated at the moment in time that you make your booking and when payment is taken not your date of stay."
Their concept of VAT payable at the time of booking completely contradicts the advice on this MoneySavingExpert website ie VAT at time of supply.
Who is right please ?
Also for what it is worth, Travelodge are still charging the same prices for 'sale' rooms- £19/ £29 etc, so they may have lowered the VAT rate but have compensated by pushing up the original price to arrive at the same amount.

kotfw

I see more and more companies not passing this rate on, this was done to stimulate the economy and all they are doing is profiteering. Why didn't this spineless government not impose penaties on those comapnies not passing it on. better still not bother with the cut as it seems to have made no difference whatsoever. Howabout we stimulate the economy by cutting back on the government, say the whole cabinet and the muppet 'in charge'

spaceboy

kotfw wrote: »

I see more and more companies not passing this rate on, this was done to stimulate the economy and all they are doing is profiteering. Why didn't this spineless government not impose penaties on those comapnies not passing it on.

Because they cant, because companies do not actually have to. Why the hell should they if they're struggling themselves. Don't blame the companies - blame the government for doing something pointless and costly.

Companies are free to adjust their prices how they like, when the VAT was reduced some took the opportunity to raise their prices. The government gave them this opportunity.

funkyparott

B & Q have today refunded £70 to my debit card. My contract made no mention of a 'prevailing rate of VAT at time of order'. They didn't even argue! Cheers

FP




Quote:
Refund on goods ordered but not delivered VAT is charged at “time of supply”. So if you put a £100 deposit on a £5,000 kitchen, under new rules you should only pay a further £4,793 when settling the balance. The key's in the agreement, if it just said ‘VAT inclusive’, it can choose whether to pass the cut on. If it said ‘£XX plus 17.5% VAT’ or ‘VAT at the appropriate rate’, you may have a legal argument that it has to.



Section 89 of the 1994 Value Added Tax Act states:-
"89 Adjustments of contracts on changes in VAT
Where, after the making of a contract for the supply of goods or services and before the goods or services are supplied, there is a change in the VAT charged on the supply, then, unless the contract otherwise provided, there shall be added to or deducted from the consideration for the supply an amount equal to the change."

Does this not mean that they are obliged to reduce the VAT charged to 15%?????

jtotheb

Quick question.

I can understand that some companies might not pass the savings on (especially when the VAT rate isn't specifically mentioned) but if in the company's literature it states that VAT will be charged at 17.5% and then DOESN'T pass on the saving to you, surely they must be breaking the law?

spaceboy

jtotheb wrote: »

Quick question.

I can understand that some companies might not pass the savings on (especially when the VAT rate isn't specifically mentioned) but if in the company's literature it states that VAT will be charged at 17.5% and then DOESN'T pass on the saving to you, surely they must be breaking the law?

Yes I would say they are.

harryhound

Depends where the offer, the acceptance and the tax point took place in the contract.

You could also get tangled up in how the suppliers "cash" discount system works.

VAT sounds simple BUT like all other taxes under the surface there are all sorts of arbitrary rules. (Jaffa Cake anyone?)

Oortne

Edinburgh Woollen Mills Shops are not passing on the VAT cut. Assistants have been told, "if asked say that the goods are well discounted already" with a smile on your face I guess. My O2 top-ups discounted even.