Businesses passing on VAT reduction

insert_random_name_here

bradders1983 said:

Indeed, this VAT reduction has not been instituted for the benefit of the consumer as they are unlikely to see a huge benefit.

I disagree. Rishi Sunak in his economic update speech said "So today, I am announcing two new measures to get these sectors moving and protect jobs." and then, moments later after announcing the VAT cut he said "This is a £4 billion catalyst for the hospitality and tourism sectors, benefiting over 150,000 businesses and consumers everywhere". Note that he explicitly said it was to benefit businesses and consumers. The benefit to businesses doesn't come from trousering the VAT, it comes from increased footfall (i.e. getting the sectors moving) due to lower prices - otherwise Sunak wouldn't have mentioned consumers at all.

mattyprice4004

Socajam said:

What is wrong with this greed - it's nauseating
As others have said, the price was paid before the VAT reduction - go away and enjoy yourself - and thanks to the Creator that you are alive and kicking.

Just what I was thinking. Let's penny pinch from an industry that's been literally forced to close for several months. 
These would be the same lemmings that were moaning if the hotel went under, and they either lost money or had to pay more to book elsewhere. 

They do say money brings out the worst in people...! 

bradders1983

insert_random_name_here said:

bradders1983 said:

Indeed, this VAT reduction has not been instituted for the benefit of the consumer as they are unlikely to see a huge benefit.

I disagree. Rishi Sunak in his economic update speech said "So today, I am announcing two new measures to get these sectors moving and protect jobs." and then, moments later after announcing the VAT cut he said "This is a £4 billion catalyst for the hospitality and tourism sectors, benefiting over 150,000 businesses and consumers everywhere". Note that he explicitly said it was to benefit businesses and consumers. The benefit to businesses doesn't come from trousering the VAT, it comes from increased footfall (i.e. getting the sectors moving) due to lower prices - otherwise Sunak wouldn't have mentioned consumers at all.

In practice this reduction will benefit the consumer very little, lets not kid ourselves.

sharpe106

The idea was to get people out and about, but yes most companies will keep it. So basically quietly increasing prices.

Grumpy_chap

I think much of the hospitality sector is struggling so much the VAT rate will be imperceptible.
We booked a hotel for June, which was £130 per room per night for two including breakfast.  We got a full refund when it was obviously cancelled.
We looked today to book for September and the equivalent rate is £160 per night.
However, the rate for July is £30 per night for two room only, or £50 per night room rate for two including breakfast and dinner.
It is clear the rates for now are survival mode.  Far more than the change in VAT has been passed on.

seatbeltnoob

It's one of those things where if you dont ask you dont get.

Thrugelmir

sharpe106 said:

The idea was to get people out and about, but yes most companies will keep it. So basically quietly increasing prices.

With reduced capacity , many establishments are going to generate less revenue. Burgers and pizzas will be no issue as highly profitable in the first place. Can afford to attract customers. 

jo4012

So a bit of advice ... booked Christmas 2020 in April 2020 and paid 50% deposit of £820 ... so 20% vat on that not problem need to pay remaining monies in November 2020.. so I contacted Hotel who are staying that the price is still the same and they are keeping the extra monies ... as they had been fully paying staff and refurbished the hotel. Can they do this as agreed holiday is 1640 including vat.

comeandgo

jo4012 said:

So a bit of advice ... booked Christmas 2020 in April 2020 and paid 50% deposit of £820 ... so 20% vat on that not problem need to pay remaining monies in November 2020.. so I contacted Hotel who are staying that the price is still the same and they are keeping the extra monies ... as they had been fully paying staff and refurbished the hotel. Can they do this as agreed holiday is 1640 including vat.

Yes, you will still be paying 1640 including vat.

jo4012

jo4012 said:

So a bit of advice ... booked Christmas 2020 in April 2020 and paid 50% deposit of £820 ... so 20% vat on that not problem need to pay remaining monies in November 2020.. so I contacted Hotel who are staying that the price is still the same and they are keeping the extra monies ... as they had been fully paying staff and refurbished the hotel. Can they do this as agreed holiday is 1640 including vat.

Yes, you will still be paying 1640 including vat.

Can I ask why ... as surely we are paying more for the holiday with the vat reduction where other companies are refunding it