Shops quietly take back the cut in Vat

SamIAm_3-2

http://www.timesonline.co.uk/tol/money/tax/article5780752.ece

Is anyone actually surprised at this news?

Did anyone realise any tangible benefit from the VAT cut in any case? I know I haven't, but then I've not exactly been spending much on the high street recently.

Livto_2

Bit of an embarressment for G.Brown this whole VAT cut fiasco has been :rolleyes:

SamIAm_3-2

Livto wrote: »

Bit of an embarressment for G.Brown this whole VAT cut fiasco has been :rolleyes:

I tend to agree. I never thought that the consumer would see much benefit from the reduction.

The only benefit I could see is that companies would pocket the reduction themselves - I don't necessarily see this as a bad thing anyway since it may help businesses short-term.

thriftybabe

I am in the midst of doing my VAT return with one month at 17.5% and the other two months at 15%. Bloomin nightmare! On looking at some of my petrol receipts following the cut in December I am still being charged at 17.5%! I have to qualify it as that as that is what I am being charged. It really is my lucky day as I got a call from the VAT inspector who want to pay me a visit!

Rochdale_Pioneers

The companies not passing it on are making excuses. Their systems will have every Shopkeeping unit (SKU) priced up as a cost and a VAT portion. Having the decreased VAT shown only at till is the simplest way of doing it - which how most retailers started off before redoing all their point of sale to reflect the lower prices.

As for the ones not passing it on, boycot them. The press ordinarily would be all over scalpers - in this case some stores are taking our money and sticking it in their pockets. Time for the press to start a name and shame campaign.

SamIAm_3-2

thriftybabe wrote: »

I am in the midst of doing my VAT return with one month at 17.5% and the other two months at 15%. Bloomin nightmare! On looking at some of my petrol receipts following the cut in December I am still being charged at 17.5%! I have to qualify it as that as that is what I am being charged. It really is my lucky day as I got a call from the VAT inspector who want to pay me a visit!

Sounds like a bit of a nightmare! It would have been a real PITA for my GF too - she has her own business but paid an accountant to do her accounts which saved her a load of hassle.

SGE1

Not sure what the big deal is. If it is the case that some companies aren't passing the cut on, then this amounts to a tax cut for businesses. I'm not generally keen on fighting their corner, but given the circumstances, if it can help their cash flow, fine.

brightonman123

have any ministers taken a cut in pay, to help us along?

divadee

a company i know hasnt passed the rate cut on as they still have to pay a fixed rate of vat. they pay a flat rate of 6% and dont claim any vat back because of this, so how is a company supposed to lower there rate when it hasnt been lowered?

chriz1000

When the cut was announced at the time it did seem like it was aimed more at helping businesses with there cash flow which could result in saving thousands of pounds each month and possibly keeping them solvent, rather than giving every day customers a measly 2.5% price cut.

Things are often priced at nice round numbers as people are more just as likely to buy something for £1.99 rather than £1.87.

I honestly believe the media picked up heavily on the whole VAT rate cut and made it out to be a customer saving rather than a business saving. I don’t believe this was the intended case, it was just a lot of retail shops saw an advertising ploy to advertise the fact that they were “passing on the saving”.

Sure businesses have to re-program there tills but VAT is included in almost everything we buy, if it wasn’t yes the saving would have to have be passed on, I’ll happily pay the same price as before the VAT cut and forget about the 2.5% cut if it means losing less shops/jobs from our high streets.

JasonLVC

A special EU panel met this week to discuss the idea of allowing certain services to be treated at the reduced rate of VAT (5%) rather than the standard rate (15%).

Now that the decision has been approved by all members states, it will now be an interesting time to see what the UK Government do with this.

The lower rate is proposed to be on private house repairs (ie, building work, patios, etc), show repairs, window cleaning, hairdressers and restaurants.

Now one view is this is exciting news and if the UK Treasury adopt these measures then it could stimulate these sectors which are dependent mainly upon the consumer (rather than other businesses) and such a reduction on VAT could not come at a better time as people have less cash in their pockets.

However, in view of the total failure of the current VAT rate cut (and the EU has report after report that confirms VAT cuts are rarely passed on, so the government took a gamble on that) - maybe we shouldn't expect the Treasury to adopt these changes at all as the loss to the Treasury will go into small traders pockets instead of the consumer.

Have the greedy retailers spoilt it for the rest of us?.