R2OK!

gfloyd · Posted: Tue Nov 25, 2008 8:14 pm Post subject: 2.5% Extra Off

With most shops displaying sales signs saying 25%, 30%, or 50% off, do you think another 2.5% off resulting from lower VAT will make much difference?

I think the shops will just pocket the 2.5%
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SantaFefan · Posted: Tue Nov 25, 2008 8:45 pm Post subject:

As somebody mentioned earlier in the day, retailers would have paid 17.5% VAT on their goods and will only be able to claim back 15%, unless there's going to be an offset on the difference when they do their VAT returns.. Rolling Eyes

more paperwork.

No, I don't think it'll make the slightest difference and I think the move is wrong. I'd like to have seen VAT knocked off energy bills but much more to help the small business man stay in business! That's where the security lays - in jobs!
It's all very well tempting people to go out and spend more money but what if they face losing their jobs through closures? are they going to spend more? of course not.

As mentioned on the Vine show today.. funny how this recession was caused by overspending and now we're being encouraged to overspend.
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gfloyd · Posted: Tue Nov 25, 2008 8:50 pm Post subject:

mark occomore · Joined: 07 Dec 2006 Posts: 9955 Location: UK

It's amazing that we have sales all year around and the signs are going up faster than you can say 50%. It's nothing new, but the government are making a big deal of it.

Talking about the cost of things. I see Fuel has gone up slightly and my local Sainsburys is charging 91p litre. I know Darling was increasing duty on fuel by 2p straight away.

It's nicking from paul to pay peter.

gfloyd · Posted: Tue Nov 25, 2008 8:57 pm Post subject:

SantaFefan · Posted: Tue Nov 25, 2008 9:00 pm Post subject:

I suppose the loss of 2.5% VAT represents a lot of cash to the Government and they see it as a big cash injection for the economy but to the individual it's peanuts..
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Johnnie Walker read out my message on Pirate Radio! Very Happy

13/8/07
I have heard how radio should be.

Ian Robinson · Posted: Tue Nov 25, 2008 9:06 pm Post subject:

It's just daft. I don't see how it's going to make a difference - and retailers are going to have to pocket the 2.5% just to pay for the extra paperwork to deal with it.

John W · Joined: 07 Dec 2006 Posts: 3367 Location: Warwickshire, UK

Yup. Earlier I heard a jeweler who has two shops. He said the VAT reduction would mean a lot or work repricing, and will hardly be noticed so for next week he will just reduce the price of items that are over £1000 Rolling Eyes

MadeinSurrey · Posted: Wed Nov 26, 2008 8:20 am Post subject:

It's madness if the Government really believe this paltry reduction will kickstart the economy. If you buy a TV that costs say, £200 the saving will be less than a fiver - what difference will that make? The whole thing is wrong.
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RockitRon · Joined: 07 Dec 2006 Posts: 7646

In the "bad old days" of Resale Price Maintenance (pre-1964) the reduction in rate of VAT would have had an effect, albeit very small. Since very few high street retailers sell anything for the full manufacturer's recommended prices these days, and their marketing strategy is to price stuff either in round pounds or £**.99 I don't think shoppers will notice any difference, and it certainly won't encourage them to spend any more.

It will give smaller businesses a headache, as they have to account for the two rates in two tax years.

As someone has already noticed, the government has taken its 2p/litre increase in duty on petrol this week, and plans to keep increasing it, as well as the usual increases on alcohol and tobacco products.

They have decided to defer the increases in the annual car tax, and the additional tax they were going to put on sales of new cars. Have you seen any car manufacturer chairmen leaping up and down with joy at the news?
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Ron

Ian Robinson · Posted: Wed Nov 26, 2008 10:49 am Post subject:

BDG · Joined: 08 Dec 2006 Posts: 202

I think the growth principle is fundamentally flawed we were bounded to get to absorption point.

There is only so many things people can buy especially on borrowed money.

The VAT idea is a very silly one and wlll make no difference except reduce the tax revenue to the government.

They would be better off using the money to create real jobs in areas in new and sustainable industries.

RockitRon · Joined: 07 Dec 2006 Posts: 7646

The reduction in Vat takes place on Monday. To ensure people don't think they have to wait until then the electrical and computer retailers have reduced prices now - the papers are full of ads showing tvs and computers at such eye-catching prices as £175.18 and £342.51

It's also Monday when the Government takes its extra 2p on a litre of petrol and diesel (I was slightly premature in my comment above).
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Ron

John W · Joined: 07 Dec 2006 Posts: 3367 Location: Warwickshire, UK

Well, my little business isn't VAT-registered and I have few overheads so no real difference there, but looking at our household monthly credit card expenditure which is usually about £1500, all with VAT on, that will save about £37 a month, so if the cut lasts a year then £444.

Then there's VAT savings from our fuel bills and other debits paid via the bank account. Maybe overall we'll save about £500 a year.

I expect other things in the budget will eat at that £500?

John W

RockitRon · Joined: 07 Dec 2006 Posts: 7646

Minor point, John, but isn't VAT on energy bills at the special rate of 5%, which isn't being reduced?
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Ron

John W · Joined: 07 Dec 2006 Posts: 3367 Location: Warwickshire, UK

RR,

Right you are! My bills for BT and Sky in a year are over a grand though so a little saving there Confused

John W

RockitRon · Joined: 07 Dec 2006 Posts: 7646

Every little 'elps! Laughing

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Ron

mark occomore · Joined: 07 Dec 2006 Posts: 9955 Location: UK