15% VAT rate

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Fast Eddie
Since: Jul 2004
Posts: 193
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Posted: Tuesday the 25th November 2008 at 14:44


15% VAT rate


I'm having a right ol' rant today and I thought this was another worthy candidate for me to get my teeth into...

So the Government is going to drop VAT from 17.5% to 15% to encourage us to spend more. Is this really going to work?

If you were toying with the idea of buying a TV for £299 would the fact that it now costs £294 tip you over the edge to now say “Oh bugger it... with that kind of saving, how can I refuse!?”

And how many retailers are going to pass this rate on?
Will your local chippie be dropping their prices from £7.99 for cod and chips to £7.83?
Coming up to Christmas will Clintons Cards be reprinting all of their price labels for cards from £1.99 to £1.95? Me thinks not.

What an absurd thing for the government to do. This will add up to a huge amount of money that the country will have to find elsewhere... but it makes absolutely no difference to the population.

It’s alright though you may think, at least fuel and booze is going down... oh no, the duty on these things is actually increasing.

Bizarre!





Daisy2002
Since: May 2004
Posts: 2109
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Posted: Tuesday the 25th November 2008 at 15:37


Your post made me laugh Laughing

A TV that was £299 & now £294 would definately make me run down to the shops.... what a bargain Slightly Confused Smug

Please excuse my ignorance.... i don't really keep up with this kinda stuff.

1. I heard that VAT was only supposed to be a temporary measure when they first bought it in many years ago, is that true?

2. Was watching a programme last night with Jeremy Paxman, don't know what its called Embarassed
The mp on there said something like.... even if companies don't pass on this saving, at least the companies will have more money Speehless OMG

Why should the likes of Tescos & John Lewis make even more money out of this when i thought it was supposed to be about helping 'US' the people.


"Love all. Trust a few. Do wrong to none."

TheMog
Since: Jun 2004
Posts: 664
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Posted: Tuesday the 25th November 2008 at 15:54


Companies don't pay VAT on anything they buy as they can reclaim it all. The only person paying VAT is the end consumer. I suppose companies will make more money from this by pocketing the 2.5% difference when the consumer pays the original price but they only pay 15% to the VAT man.

As Eddie said it really is a bizzarre move by the government.


Lived in London since 2003, it's alright I suppose.

Adam_AWD
Since: Nov 2008
Posts: 47
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Posted: Tuesday the 25th November 2008 at 19:39


This VAT cut can work in a couple of different ways: retailers either pass on the savings to us by cutting the price OR they can keep the price the same and improve their profits. That second option might sound a bit cheeky, but for a lot of businesses that are really suffering that could mean the difference between firing an employee or not, or just completely closing down. Like tesco says, every little helps.

[BTW, if you want to save some real money check out my new site AfterWorkDeals.com which has offers at bars and restaurants around London]


mistakenplane
Since: Sep 2008
Posts: 724
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Posted: Wednesday the 26th November 2008 at 10:19


Well companies will likely drop prices a little more, as the 2.5% change is going to be uneven, they will round it down I should think.

Will it make people spend? Some will yes, it puts a few more £££ in your pocket. Of course it will be paid back some other time but if it helps get people out spending its all good!


jacqs
Since: Oct 2008
Posts: 614
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Posted: Wednesday the 26th November 2008 at 15:28


ORIGINAL: mistakenplane

Well companies will likely drop prices a little more, as the 2.5% change is going to be uneven, they will round it down I should think.

Will it make people spend? Some will yes, it puts a few more £££ in your pocket. Of course it will be paid back some other time but if it helps get people out spending its all good!


All i know is that it is going to cause much work and problems at work.The Instructions for business arrived today and are a pain ..
Wonder how much the mail out cost????









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