Price excludes VAT

RobertinHerts

HMRC webite says:


Prices advertised to the public in ordinary retail shops include VAT. No tax will be added to the price when you pay. This is a legal requirement.


A store has 'Price excludes VAT' close to most prices, but there isn't any larger signage. How can I find out if this complies with whichever the law HMRC are referring to?

wealdroam

RobertinHerts wrote: »

HMRC webite says:


Prices advertised to the public in ordinary retail shops include VAT. No tax will be added to the price when you pay. This is a legal requirement.


A store has 'Price excludes VAT' close to most prices, but there isn't any larger signage. How can I find out if this complies with whichever the law HMRC are referring to?

What store?

Are you saying it is an ordinary retail shop and there are no vat inclusive prices?

RobertinHerts

wealdroam wrote: »

What store?

Are you saying it is an ordinary retail shop and there are no vat inclusive prices?

I would call it an ordinary retail shop but I don't know how the term is defined. It's called Verulam Tile Warehouse. The only VAT inclusive price I saw, when I specifically went to check the situation, was for a £2 sample. I know because it said 'VAT included'.

wealdroam

I too don't know the definition of an 'ordinary retail shop', but suspect that maybe this establishment isn't one.

The are a few clues...

1) they call themselves (amongst other things) importers.
2) they are on an Industrial Estate.
3) there's that word 'warehouse'.

All a bit circumstantial.

Do you have a problem?

mo786uk

Whether they have to display prices or not is not down to the stuff described above but whether or not they will sell to consumers. They can exclude VAT if they only sell to businesses.

The law is called the Price Marking Order. - http://www.legislation.gov.uk/uksi/2004/102/contents/made

This ONLY applies to goods. i.e you can go in and buy the goods. It doesnt apply to services, i.e you go into a shop and they sell you the product and installation. But again if they sell the product without service then its a good.

RobertinHerts

wealdroam wrote: »

I too don't know the definition of an 'ordinary retail shop', but suspect that maybe this establishment isn't one.

Does the location and what a business calls itself make a difference then? Anyone can walk in off the street and make a purchase on the spot, just as with Tops Tiles, with whom I'd been comparing products and prices.

kazwookie

Construction industry items are priced + vat, maybe this unit falls into that area.

JasonLVC

Businesses which are aimed at both the consumer and also for other businesses/traders are not 'retail' outlets and therefore they do not have to display prices inclusive of VAT.

So Focus/Homebase will only show inclusive VAT but places like Buildbase or Plumbcentre will likely show ex-VAT prices.

Provided the shop clearly states that the price is exclusive or inclusive - as the shop in qestion is doing - then I don't see what the problem is.

From the same web page as the OP's original quote from HMRC, if you scan down the page and read a bit more it states :-

"If they're aimed at both consumers and businesses, they will usually show a VAT inclusive price, but may also show a price without VAT."

"The VAT inclusive price must be given equal importance, but read carefully to make absolutely certain you understand what price you'll pay."

"Prices aimed only at businesses are usually shown with no VAT included. VAT will be charged on top of the price shown"

http://www.hmrc.gov.uk/vat/sectors/consumers/basics.htm

So basically, this shop is aimed more at the trader rather than the consumer but it is 'open to the public' to buy, by the look of things.

mo786uk

The legislation quite clearly states

"where a trader indicates that any product is or may be for sale to a consumer, he shall indicate the selling price of that product in accordance with the provisions of this Order."

“selling price” means the final price for a unit of a product, or a given quantity of a product, including VAT and all other taxes;


What you might find though is that the authroities will turn a blind eye to builders merchants and the like

RobertinHerts

mo786uk wrote: »

The law is called the Price Marking Order. - http://www.legislation.gov.uk/uksi/2004/102/contents/made

Thanks for that much appreciated. Shame HMRC couldn't provide a link on their website:(

Article 4 doesn't actually define 'Selling price' and whether or not VAT must be included for non-businesses, however...

I then read the Explanatory note which explains that this legislation implements Directive 98/6/EC of the European Parliament and of the Council (OJ No. L180, 18.3.98 p. 27) on consumer protection, and goes on to say 'Article 1 defines the selling price as the final price including VAT and other taxes'.

This would lead one to think that business selling goods to consumers must show the VAT inclusive price.

RobertinHerts

JasonLVC wrote: »

Businesses which are aimed at both the consumer and also for other businesses/traders are not 'retail' outlets and therefore they do not have to display prices inclusive of VAT.

So Focus/Homebase will only show inclusive VAT but places like Buildbase or Plumbcentre will likely show ex-VAT prices.

Provided the shop clearly states that the price is exclusive or inclusive - as the shop in qestion is doing - then I don't see what the problem is.

From the same web page as the OP's original quote from HMRC, if you scan down the page and read a bit more it states :-

"If they're aimed at both consumers and businesses, they will usually show a VAT inclusive price, but may also show a price without VAT."

"The VAT inclusive price must be given equal importance, but read carefully to make absolutely certain you understand what price you'll pay."

"Prices aimed only at businesses are usually shown with no VAT included. VAT will be charged on top of the price shown"

http://www.hmrc.gov.uk/vat/sectors/consumers/basics.htm

So basically, this shop is aimed more at the trader rather than the consumer but it is 'open to the public' to buy, by the look of things.

Thanks. However everything with a price had only one price and that was with 'price excludes VAT'. The one exception as mentioned above, was the £2 sample.

There were a number of couples, some with children, in the store and they didn't look like traders to me.