VAT down to 15%

[Oneeyedvic]

Do you think businesses will pass this on?

The items priced at �99.99 will be in future marked at �97.87?

Will The Daily paper that costs 50p now be 49p?

If you spent �25 on a gift, would you now be only spending �24.47?

[Ethel]

You don't pay VAT on newspapers

[Oneeyedvic]

Okay, will the <insert item here> that costs 50p now cost 49p

[Lakitu]

^ Mars Bar :o)

[jake-the-peg]

I suspect some will and some will not.

It will show quite clearly which markets have effective competition and which do not.

[weecalf]

Vat reduction =con .What darling want is us to spend more money and he is saying we will steal less if you spend more .If they are serious and want to help reduce to 0% .We have already pad tax on wages so why do we have to again pay another tax on what megre amount we have left.To quote from an old song .Darling it cold out side give us cheaper fuel so at least we can starve in comfort .

[anotheoldgit]

If they are serious and want to help reduce to 0% .

We are not allowed to, EC rules Vat cannot be less than 15%.

Just one more benefit????? from being a member of the EC.

[kinell]

Yeah, i was looking at a nice 42" lcd tv at the weekend priced at �900 but decided i could not afford it.

Now it may only cost �880.85,.. a veritable bargain.

It will make all the difference to my buying decision.(LOL)

When the rate changes i shall rush out and do my patriotic duty and spend and spend and spend.

With the vat saved i may even buy a chinese take away...

[dot.hawkes]

i am confused about all of this, if the company selling goods with VAT on them, will they not have paid VAT top their supplier at the higher rate? if so, how can they then sell them at a lower rate? surely it will take months for the saving to be passed on thru high street outlets. Or is VAT only added at POS?

(I know i should know this)

also, if goods are of foreign manufacture and imported, is VAT paid to the overseas supplier or just when the goods come onto the EU/UK? if so, when will the rate alter on imports?

[Octavius]

I presume that when the great unwashed walk into a shop they wil be overwhelmed by their buying potential when the shop signs say......


"2.5% off EVERTHING"

[youngmafbog]

Excuse me while I go p*ss in the ocean. It will have the same effect as this, except that my p*ss would not come back to haunt me in a few years.

What a pointless headlining gesture. Retail outlets are already discounting by far greater amounts - that has not worked yet so why would 2.5 %.

Typical useless labour tripe

[weecalf]

Value added Tax is that supposed to be what our friends in Downing Street think should be added to the price for the privedge of being able to buy it in the firstplace ..Never can remember why it was thought up.

[THAIBUS]

Will the Pound shop be the 98p shop

[dot.hawkes]

if it does they will run out of 2ps in Wigan : )

[factor-fiction]

Mathematically speaking it's not 2.5% off everything- it means something that cost �117.50 will now cost �115, which is a reduction of �2.50 on �117.50.... which is a 2.1% reduction.
Yes I partly agree with oneeyedvic- it won't affect some prices such as 99p items, but it should lead to reductions in bigger ticket items. And if you extend your argument you would be saying prices wouldn't go up either if VAT were to increase, since a 50p newspaper wouldn't go to 51p.

I note petrol prices won't be reduced next month when VAT falls as the fuel duty is to rise to offset the VAT cut

[Octavius]

My response was not an exercise in mathematical exemplification but of the general perception of what this change entails or what people will identify it with, merely an ostensive definition.

The likelihood is that for small businesses, the reduction in VAT will not be passed on, but written off as an overhead cost for changing all their prices.