We're aware that some users are experiencing technical issues which the team are working to resolve. See the Community Noticeboard for more info. Thank you for your patience.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!

Vat reduction

Options
I have booked a weekend away in november, having paid the required deposit, will it be cheaper now that Vat has been reduced to 5%?

Comments

  • bradders1983
    bradders1983 Posts: 5,684 Forumite
    1,000 Posts Third Anniversary Name Dropper
    Probably not given the tax point was at the point you paid the initial sum.  Also the tourism sector is on its knees, they are hardly going to be giving out VAT discounts and you were happy enough to pay the original price.
  • mattyprice4004
    mattyprice4004 Posts: 7,492 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    You booked a break for X price, the price is still X price. 
    No, you are not entitled to the difference; the businesses' VAT affairs are theirs and theirs alone. 
  • tripled
    tripled Posts: 2,882 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    The VAT rate they have to charge is the one at the "tax point" - see https://www.gov.uk/vat-record-keeping/time-of-supply-or-tax-point. They will have to hand over the full 20% to HMRC.

    The only possible way to get around this is if they will allow you to cancel without penalty. You could then re-book from Wednesday at the lower VAT rate (however if they up their prices you wouldn't necessarily be any better off).
  • Please can MSE confirm what the intent of the Chancellor was by reducing the VAT on leisure activities and what companies are expected to do? For example if the hire of a camper van is £1000 for a week inclusive of VAT at 20% now, what should the price to the consumer be once the VAT reduction commences?
  • daveyjp
    daveyjp Posts: 13,491 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    As Mattyprice states above.

    It will either be £1000 a week inclusive of VAT at 5%, or £874.65 incusive of VAT at 5%.

    The company can decide to do either.

  • daveyjp said:
    As Mattyprice states above.

    It will either be £1000 a week inclusive of VAT at 5%, or £874.65 incusive of VAT at 5%.

    The company can decide to do either.

    Hi Dave,
    Apologies if I'm not getting this, but £833.33 should be the price (ex VAT@20%) to get to £1000 and £833.33 with VAT@5% will be £875 surely?
    However my question to MSE moderators was intended to understand what the government are trying to achieve and what this might mean to consumers.
    Cheers ;-)
  • daveyjp
    daveyjp Posts: 13,491 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    Government have achieved their aim, a temporary reduction in VAT.

    Your maths is correct, but there is nothing to stop the company charging £1,000, then accounting for VAT at 5% giving £50 to HMRC and keeping the £950.  The cost to you is still £1,000. 

    How this is dealt with by companies is a commercial decision for them as Government haven't stated the reduction must be passed to customers.

    Some companies may reduce their charges (Caravan and Camping Club have done for their campsite fees), others may not.




  • Penguin_
    Penguin_ Posts: 1,584 Forumite
    Fifth Anniversary 1,000 Posts Name Dropper
    Please can MSE confirm what the intent of the Chancellor was by reducing the VAT on leisure activities and what companies are expected to do? For example if the hire of a camper van is £1000 for a week inclusive of VAT at 20% now, what should the price to the consumer be once the VAT reduction commences?

    The price to the consumer would be £1000.
Meet your Ambassadors

🚀 Getting Started

Hi new member!

Our Getting Started Guide will help you get the most out of the Forum

Categories

  • All Categories
  • 350.7K Banking & Borrowing
  • 253K Reduce Debt & Boost Income
  • 453.4K Spending & Discounts
  • 243.7K Work, Benefits & Business
  • 598.5K Mortgages, Homes & Bills
  • 176.8K Life & Family
  • 256.9K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16.1K Discuss & Feedback
  • 37.6K Read-Only Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.