Cut in VAT today in UK?

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panic!
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Cut in VAT today in UK?

Post by panic! »

So, if we're going to see a VAT cut from 17.5% to 15% today.

How do you think will this affect items with RRPs such as the Playstation 3 (£299), iPods etc. Will they be cut in price by 5% for the consumer? or remain the same with the retailer making more profit?
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Re: Cut in VAT today in UK?

Post by onion2k »

panic! wrote:So, if we're going to see a VAT cut from 17.5% to 15% today.

How do you think will this affect items with RRPs such as the Playstation 3 (£299), iPods etc. Will they be cut in price by 5% for the consumer? or remain the same with the retailer making more profit?
Three things:

1. It might not be effective immediately. Even the government understand these things take time to implement so they may phase it in over the next couple of months.

2. Most places will keep the cut for themselves unless they're in a high competition market. Supermarkets will pass on the full 2.5%, but ordinary shops won't unless their competition is.

3. Shops won't give a bigger discount unless they were planning on discounting anyway.

If I was buying something big like a PS3 I'd definitely wait until after Darling's speech to see what will happen, but I wouldn't get my hopes up for a particularly big saving.
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panic!
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Re: Cut in VAT today in UK?

Post by panic! »

Hmm if the retailers pocket the saving themselves that would totally defeat the purpose of the cut: which is to get people spending. That would be annoying!

I wasn't planning on buying anything specific, just trying to understand how it's going to work! Although, I'd like a PS3. They're just a bit expensive at £299 for the 80GB
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Re: Cut in VAT today in UK?

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panic! wrote:Hmm if the retailers pocket the saving themselves that would totally defeat the purpose of the cut: which is to get people spending. That would be annoying!
Its all physcological. People here about all these cuts here and there so feel more confident about spending money.
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panic!
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Re: Cut in VAT today in UK?

Post by panic! »

onion2k wrote:
1. It might not be effective immediately. Even the government understand these things take time to implement so they may phase it in over the next couple of months.
"The cut in VAT is expected to come into effect in the next few days in time for Christmas shopping. "


LET'S SHOP :)
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Jenk
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Re: Cut in VAT today in UK?

Post by Jenk »

It's meant to help small businesses make a bit more cash, not necessarily the shopper spend more. Big firms will no doubt pass on the reduction, but small companies won't (and shouldn't, imo) do this. Small companies are of course the biggest victim of any economical downturn, so any help they can get is good.
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panic!
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Re: Cut in VAT today in UK?

Post by panic! »

Yeah, I should imagine most of us are working in small companies on here but one thing is that B2B (like most web dev companies are) won't see much benefit from a VAT discount unfortunately.
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Re: Cut in VAT today in UK?

Post by onion2k »

He put NI up by 0.5%. Any saving I might make on the VAT drop will be swallowed up by the reduction in the amount I earn. And he put fuel duty up to grab back the VAT lost on petrol so I don't even save on that.

I lose. :(
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Re: Cut in VAT today in UK?

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onion2k wrote:
I lose. :(
Did you ever think you would win? :banghead:
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panic!
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Re: Cut in VAT today in UK?

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onion2k wrote:He put NI up by 0.5%.
Isn't that in like 3 years though? and Fuel is very low at the moment. It will be 82.9p by Christmas. So we've had an almost 30% reduction on that in the last few months.
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Re: Cut in VAT today in UK?

Post by Jenk »

Heh.. I've already been asked to complete 3 "jobs" of replacing hardcoded 17.5 values on eShops and spreadsheets/access db's.. easy money :P
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