VAT: concessions change 14 day rule and transition to new rate
HMRC has announced temporary concessions to assist businesses with the administrative problems of accounting for a change in the standard rate of rate.
These are in respect of the following:
- Electronic tills and cash registers - if your till was printing out receitps after 1 December at the wrong rate, because you were unable to change it in time, you may still account to HMRC for VAT on transaction, regardless of the till receipts using the new fraction of 3/23.
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Marketting prices
£9.99 becomes £9.78
£19.99 becomes £19.56
£39.99 becomes £39.14
£89.99 becomes £88.07
Whilst some retailers are anxious "to be seen to" reduce prices on the above scale, I wonder how long it will be before they submit to marketting needs and revert back to "£x.99" prices?
And, what about Poundland - will they have to rename their stores 98penceland ? I think not !
Workload
Our local Morrisons has a notice at the door saying they've reduced VAT on their tills but updating the shelf labels is still in progress, so you may get charged a lower amount than that shown on the shelf label.
There's also the issue of items which have the price marked on the packaging or on a label. Clothing stores in particular potentially have to update hundreds of thousands of individual garment labels. I suspect many will decide not to bother, and simply keep the reduction for themselves.
Neil.
Not worth the effort
I advised a Golf Club that they could amend their social subscriptions to the 15% VAT rate for the time portion after 30 Nov 2008, but they've decided not to as there'd be no commercial benefit to the club as they invoiced them as "X + 17.5 VAT" and would have to credit them and re-invoice them at "X + 15 % VAT" : the members would benefit but with significant administration costs for the club.
So, they've decided to to let things lie as they are and wait and see if any members complain about no VAT reduction !
Rushed legislation
I was in my local CoOp late last night and they were about half way through repricing stock. It was a smallish store with shelf-only pricing and they were still at it.
I doubt that they are unique.
They were all naturally thrilled at the cost and effort of reducing the price of stuff by a penny or two.
I just wonder how on earth our beloved leaders thought it would be possible to switch VAT rates with so little notice.
I like M&S approach
I ordered something online last night.
The final page showed Goods £xx.xx (as priced on the site) VATback £-x.xx Net price£x.xx. They seem to have made it into a marketing angle. Bless!
Oh well, I suppose you've got to try everything these days!