VAT cuts
Are retailers actually going to implement the cuts in VAT?
If my highly subjective survey of businesses is anything to go by, then probably not completely.
Have you got your works Christmas menu yet? Do you think the menu prices will drop by 2.13% (from £117.50 to £115.00)?
If you work in a shop, are you going to reprice your entire stock before Monday?
If your costs (petrol etc. etc.) have all gone up and been absorbed by you, are you going to take the extra profit and cut some of your losses, or give a discount that no-one notices?
Some items are going to be cut, but don't expect everything to change.
If my highly subjective survey of businesses is anything to go by, then probably not completely.
Have you got your works Christmas menu yet? Do you think the menu prices will drop by 2.13% (from £117.50 to £115.00)?
If you work in a shop, are you going to reprice your entire stock before Monday?
If your costs (petrol etc. etc.) have all gone up and been absorbed by you, are you going to take the extra profit and cut some of your losses, or give a discount that no-one notices?
Some items are going to be cut, but don't expect everything to change.
9 comments:
If all shops hotels etc have bought their stock and paid 17.5% VAT then would they lose money if they suddenly dropped their VAT by 2.5% ??
It is going to cost the country millions as firms will have to re-program their billing systems for 15%. Also stationery will have to be changed, etc, etc, etc. Plus how many mishtakes are going to be made on invoices? Its a bloody nightmare.
Anyway the answers to your various questions is NO!
Surely the shop keepers don't sell their goods at the same price they bought them. They'll only suffer a loss from the markup they put on the goods.
No,
you claim the vat back at 17.5% (assuming that you have been charged 17.5%) and charge 15%, nobody loses anything.
Let's assume that government consideration being given to raising of VAT at a later date to 18.5% is true. Isn't it strange that the same people who see a lowering of VAT by 2.5% as an insignificant change which will not alter consumers' behaviour one whit, see the raising of VAT by 1% as a 'tax bombshell'?
good point no. 5
Most shops sell at a price that is less than the next whole pound to make the prices look attractive e.g. £4.99 or £4.95. IF they reduce the price to £4.88 or £4.85 how quickly will those prices creep up to the 'accepted' price points? Not long, I suspect.
I heard that the reason for the .99 or .95 in prices was that the till had to be opened to give change. Harder for dodgy shop workers to pocket the notes. Not sure if true or not.
Penny pricing (.99) is used as a psychological tool to persuade people to buy. £4.99 seems a lot lower than £5.00. With most people nowadays paying by card the opportunity to nick notes isn't as great as it was.
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