Esporta failed to pass on VAT reduction

spammylou

Hi everyone

I have seen this thread before but it was old so I have started a new one

My partner and I have a membership with this gym which we are cancelling, but, we discovered yesterday from a manager that used to work there that my partner bumped into, that VAT wasn't passed on to Esportas customers, and neither was it going to be unless the customer kicked up a stink.

I've done me maths, (badly probably) and have arrived at although they were putting up the yearly subs by £2 (they always do) even with this increase and the decrease in VAT they owe us 5.55 per month. Our subs were 114.00 and then went up to 116 when VAT was reduced.

Am I also right in saying that this was not lawful to pass the reduction on? BTW partner is going straight up there today to tell all the other members :mad:

I cannot wait to leave and go to DW who is mega cheap and much better.

Freddie_Snowbits

I did not pass on the VAT reduction to my clients either, so what is your point?

Oh, nor did I increase my prices when it went back up!

(Corporate clients sitll pay the same and VAT was levied on top)

bingo_bango

There was no legal requirement to pass the VAT reduction on. Some companies did as a marketing ploy, others didn't. I trust you'll be advising OH to tell all the other customers this little fact at the same time as the rest of the rant he'll have?

spammylou

The point is that they reclaim VAT where as we can't.

Whether there was a legal requirement or not, if every company and shop and business didn't bother to pass on VAT there would have been a major outcry.

So why should we not ask for the reduction to be passed on.

Anihilator

spammylou wrote: »

The point is that they reclaim VAT where as we can't.

Whether there was a legal requirement or not, if every company and shop and business didn't bother to pass on VAT there would have been a major outcry.

So why should we not ask for the reduction to be passed on.

No there wasnt.

The VAT was changed to help retailers and improve the economy. It was nothing to do with reclaiming etc. It was entirely up to retailers whether they wanted to pass it on or keep the small amount of money they gained here.

Those who did decrease prices I bet increased them again very quickly

It was ploy by these companies and there was no real expectation that the VAT was to be passed on, it was never its intention.

BargainGalore

They dont have to pass the decrease or increase on as Bingo said

If you are unhappy with that vote with your wallet or purse and leave

neilmcl

spammylou wrote: »

The point is that they reclaim VAT where as we can't.

Whether there was a legal requirement or not, if every company and shop and business didn't bother to pass on VAT there would have been a major outcry.

So why should we not ask for the reduction to be passed on.

Why do people think that VAT is something that belongs to them, its not, it never was, it's a tax that belongs to HMRC. They're not reclaiming anything. The company adds VAT to their charges to you and then has to pay this to Customs. They can offset some of this against purchases of their own that attracts VAT that's all.

JasonLVC

From a strictly technical point of view, the posters here are correct in that there is no legal obligation on the supplier to pass on the VAT cut.

Contractually, it may make a difference though. Did the OP sign up for a monthly membership that was expressly described as say £25.54 + VAT at the prevailing rate (which would have been £4.46 at 17.5% and thus a total membership fee of £30 oer month.

Or

Did the member simply sign up to a fixed £30 a month membership fee (including VAT).

There's a big difference. The first sets out what the before VAT price is to which VAT is then added whereas the second scenario is a fixed amount deemed to be 'all in'.

Many mobile phone companies, my own included, have reduced their monthly charges to reflect the lower VAT. If you were on a £30 p/month mobile contract before, you should expect to see your mobile phone bill to have dropped by a few pence last year and then go back up this year. I believe British Gas service contracts were also treated in this regard.

It does sound like the club has 'done a Sky' and simply increased charges at the same time as the VAT rate change, thus blurring the line between what is actually correct.

peachyprice

spammylou wrote: »

Am I also right in saying that this was not lawful to pass the reduction on? BTW partner is going straight up there today to tell all the other members :mad:

.

Sorry, no you're not right, there is no legistation stating that the VAT decrease has to be passed onto the customer.

:
Originally Posted by spammylou
The point is that they reclaim VAT where as we can't.

Whether there was a legal requirement or not, if every company and shop and business didn't bother to pass on VAT there would have been a major outcry. Yes, this is one of the reasons the whole VAT debacle was such a farce

So why should we not ask for the reduction to be passed on.

Because you have no legal rights to have the reduction passed on to you

rsykes2000

spammylou wrote: »

partner is going straight up there today to tell all the other members :mad:

Sadly your partner will achieve the sole end of making him/herself look a bit of a fool. Hopefully you can catch them before they do this...

hippey

As long as VAT is charged at the correct rate then they don't have to pass on the reduction they simply make more money before vat. When the rate reverts back they make less.

But it would be unlawful to charge an incorrect rate. Some companies did pass the cut on some didn't that would be a commercial choice.