VAT reductions - being passed on by retailers?

TwoCan_2

RobertoMoir wrote: »

You can't. They can set prices how they want and aim for the extra profit if they want, just as we can choose to shop elsewhere.

Hi. Totally agree with the points you have made. I guess my "beef" is that the notice I saw at Next implied that prices on sales tickets had been adjusted to take account of the reduced VAT rate. This, to me seems to be (potentially) misleading at best, if in fact that they are utilising the reduced VAT rate in order to increase profits. I would imagine that Next are not the only retailer who are taking this stance...

RobertoMoir

Pobby wrote: »

I really did have to laugh.Old Gordo, the man who saved the world. Banks being bailed out, high street names going into liquidation, housing in free fall, stock markets falling. And he comes along with this. 15% vat rate !!!!!!! Honestly, how much was that going to do to get us all spending!!!!!!!

Maybe if he reduced VAT by 15% instead of to 15% huh?

Even then, this was always a very thin stew indeed. VAT is supposed to be a tax on luxury goods, and I suspect that anyone who is worried about their home or being able to put decent food on the table for the family or even simply just keeping the stuff they already have still won't be that tempted.

I'm sorry it's come to this but people are finally having their nose rubbed in the problems with too much spending money you don't have, and knocking money off for any reason won't stop these people thinking "Know what, I'll maybe wait a while before getting a new TV. 32" HD ready isn't that bad, I don't actually need 40" HD ready and a new sideboard strong enough to hold it."

Cat695

RobertoMoir wrote: »

What would they be prosecuted for? Last time I checked, attempting to make a profit wasn't illegal.

They're not obliged to pass on the VAT reduction to us. They can't claim to be charging 17.5% vat of course, but they can raise their prices to account for the VAT reduction and pocket the difference.

How do next make a profit on VAT??

RobertoMoir

Cat695 wrote: »

How do next make a profit on VAT??

I'm not sure that they do.

Places that are profiting from the reduction in VAT raise their ex. vat prices enough so that the total inc. vat remains unchanged. The difference between the two is additional profit..

TwoCan_2

RobertoMoir wrote: »

I'm not sure that they do.

Places that are profiting from the reduction in VAT raise their ex. vat prices enough so that the total inc. vat remains unchanged. The difference between the two is additional profit..

Thanks. My point exactly!

Maybe I was being a bit naive when I thought that the idea of introducing the VAT reduction was to lead to more competitive pricing and in turn stimulate increased customer spending / confidence, and that retailers would do the decent thing and not see it as an opportunity to bolster their balance sheets.

I would feel less disillusioned with this whole thing, if the retailers were just more open and transparent about their intentions...

RobertoMoir

TwoCan wrote: »

Thanks. My point exactly!

Maybe I was being a bit naive when I thought that the idea of introducing the VAT reduction was to lead to more competitive pricing and in turn stimulate increased customer spending / confidence, and that retailers would do the decent thing and not see it as an opportunity to bolster their balance sheets.

I would feel less disillusioned with this whole thing, if the retailers were just more open and transparent about their intentions...

Our honoured dictator and his lackey gave the excuse that it was to stimulate the economy. Arguably, a faltering business improving its profit margins by keeping the price where it is and improving their margins meets their goal. Given the number of high street chains that are over or at least orbiting the drain right now, there certainly is an argument that this is reasonable in some cases.

But yes, I do agree with your overall sentiment. I do so much dislike deceitful practices and actually would have less problems with a business that admitted what it was doing than one that tried to do this on the quiet.

beingjdc

Well, the 1st of the month has arrived and I can confirm that the VAT has not been cut on the only significant VATable expense I have, my membership of a posh gym. Charming!

MiserlyMartin

I was also in a shop that didn't seem to have passed on the VAT cut. What can you do? Is a gym a VAT able product

Generali

ad9898 wrote: »

Can't say I've noticed, however what I will notice is the £12 billion we have to pay back.

Is that the estimated cost of this Bonanza Giveaway?

Hmm. @ 5% that's GBP600,000,000 pa until default/repayment happens - a score per household or thereabouts.

Just as well Mr Brown is some latter day economic demi-deus. If he was just some political eff-up trying to buy votes with a cynicism unmatched this side of WW2 then you guys would be in a lot of bother...

RobertoMoir

beingjdc wrote: »

Well, the 1st of the month has arrived and I can confirm that the VAT has not been cut on the only significant VATable expense I have, my membership of a posh gym. Charming!

Are you saying you have an invoice that still shows VAT being taken at 17.5%? I'd be asking the management about that for sure.