And a lot are, was in a shop yesterday that had a notice saying the VAT reduction would be applied as a discount at the till. This stikes me as the simple pragmatic approach rather that all the agro of changing VAT inclusive price labels and, as you say, checking for "silly" prices as a result.
A lot of people seem to be confused and think that prices will come down by 2.5%.
The saving of 2.5% VAT on =A340 (inc VAT) is only 85p.
The prospect is one of saving =A31 in every =A347.
MBQ
Of course, it will be a saving of £2.50 per £117.50 not £100.
I might just have a dish of pound coins on the counter with a sign 'please take one', like the local petrol station do with pennies.
Yes, some very clever maths going on with the Government/Inland Revenue. They are presenting this as a drop of VAT by 2.5% when it is more like
2.13%.You must always take the 'NET' price (without VAT) and multiply it by the new 15% You should NOT take the VAT inclusive price and simply chop 2.5% off. £100 x 17.5% = £117.50 £100 x 15% = £115.00 ... a diference of £2.50
But if you take VAT inclusive price and chop 2.5% off you don't get the full £115.00, £100 x 17.5% = £117.50 - 2.5% = £114.56 and not £115.00. The actual 'drop' in VAT is more like 2.13% £100 x 17.5% = £117.50 - 2.13% = £114.99.
I would imagine that firms who advertise their prices EX VAT would benefit the most as they would only have to change the VAT rate. Firms like MachineMart advertise their products with both EX VAT and INC VAT prices, therefore you can still work out their prices from older catalogues by using EX VAT prices and just adding the new rate of VAT on. In the end, all companies who charge VAT are unpaid tax collectors, doing the Governments work for them and not receiving any financial compensation for having to re-adjust all their VAT INC prices. There again, that should not give any company any excuse NOT to pass on the difference to the customer, or would they agree to defrauding the Inland Revenue?? Dave
"Dave" gurgled happily, sounding much like they were saying:
Umm, not quite. It _is_ a drop in VAT of 2.5%.
17.5% down to 15%.Nobody ever said that was equivalent to a drop in a vat-inclusive price of 2.5%. 'course it isn't.
Trouble is, Joe Public is functionally innumerate, and just doesn't understand basic mathematics...
I thought Darling Alistair wanted to make it EASIER for us to get access to credit, not to chop 15% off the revolving interest free loan he gives us every quarter?
A Tax "Expert" on Working Lunch today was asked about this sort of situation but specifically about the VAT on a deposit made before today and the answer was that there was nothing in it for the contractor but HMRC had allowed contractors to reduce the VAT to 15% on deposits made before today but the contractor wasn't obliged to do so but whatever amount of VAT he took had to be passed on to HMRC .The lady suggested asking the contactor politely to credit the deposit with the lower rate and they almost certainly would do so . It has been said elsewhere that the rate of VAT should be that in force at the point of delivery so I'd expect you only to pay the reduced amount when you go to pay for the DG Units but don't get too excited over what you are going to save ..
You're (technically) wrong here. The definition above of the Tax Point is correct, and organisations that invoice more than 30 days after supply are running the risk of not accounting for VAT correctly. On an Inspection by HMRC they could be pulled up for it, the logic being that they'd be reclaiming the VAT on goods that they bought sooner than paying over the VAT on goods that they'd supplied.
For practical purposes though HMRC have said that they'll be sympathetic and not penalised businesses that can't quickly and easily comply with the letter of the law in this quarter's return.
Matt
Just heard on the radio - Government has put special rules in place for this VAT reduction, and the date for the purposes of VAT rate in force is the date when the supply of goods or services is completed, not the date you order or pay for them or are invoiced for them. In the case where invoices and payments were made before the reduction but supply completes afterwards, there's a VAT credit note mechanism to get the excess VAT back from the retailer, or if payment hasn't yet been made against an invoice, the retailer can simply tear up the old invoice and reprint with correct VAT amount on it.
Details are apparently somewhere on the HMRC website and are being sent to all VAT registered businesses.
The tax 'rate' has dropped by 14.29% :-)
Unfortunately, that is not an option on a web site. However, if they apply the correct discount, I wonder how many people they will get complaining that they did not get 2.5% off?
Colin Bignell
That's all assuming that people were aware of the price of particular goods/services BEFORE the drop in VAT. Dave
If the reduction is applied as a discount at the till, as stated, they will have the previous price marked on the goods.
Colin Bignell
nightjar > And a lot are, was in a shop yesterday that had a notice saying the VAT
That's what Tesco did for 28/11-1/12: "All prices currently displayed on Tesco Direct include VAT at 17.5%. These prices will be automatically discounted at the checkout to be equivalent to the new 15% VAT prices. This means a discount of 2.13% on all items."
I got their usual monthly summary email of VAT Note changes over the weekend, the usual heaps of specific rules that always apply to some tiny sliver of the economy, and not a peep about VAT rate changes that affects almost everyone.
Look you retard
I replied to your first post before your retraction came through
so, put quite simply, how do you expect me to have seen your retraction before it arrive
and no I'm not drunk
better leave that in ...
snipped s**te
In message , Andrew Gabriel writes
A bit late now, isn't it
Now, now girls. Put your handbags away. Kiss and make up and give us all a rest. Mickey.
Only if the commerce package doesn't have the facilty for discounts, a rather poor package if it doesn't IMHO. OK it might need to be enabled but it should be there.
Quite a few I expect, thinking about the shop mentioned above I think they were going to knock 2.5% off...
There was a shop featured in Working Lunch today that were taking 3% off at the moment as their system wouldn't allow half percentages .
I also got an e-mail from a website that has no shop outlet where they are keeping their prices the same at the moment and adding up all the reductions that customers would have got and having a draw among all registered customers ( regardless if they have ever bought anyhting) for what it amounts to.
So what happens when you complete the supply or goods or services in discrete packages, but only invoice for them on a monthly accrual basis I wonder?
I also wonder if it gets more complicated if you are registered for "cash accounting" [1] with the VAT people - since then the tax point is strictly speaking not the invoice date, but the actual payment date.
[1] Cash accounting is an option for businesses with a turnover below 400K (IIRC), that means the VAT only becomes due on receipt of payment from the customer, rather than at the point the invoice is raised. Handy if you have clients that like to take their time paying bills.I shall wait with baited breath! ;-) (not)
(I decided the easiest thing to do with our consultancy clients that use tech support on an ad-hoc basis, was to make sure all outstanding time logged was invoiced at the old rate on the last day of November. It seemed a bit harsh, but most of them are VAT registered and can reclaim it anyway).
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