Stealthy VAT Increase . . . have you noticed?

[Perplexus]

For those of us that use the VAT Flat Rate Scheme, and are classified as 'Repairing personal or household goods', the rate at which we pay VAT decreased in December 2008 from 8.5% to 7.5% in the government's 'Great VAT Giveaway'.

 

Now that the base rate has been restored from 15% to 17.5%, many flat rate percentages have been increased from their previous levels. If your business is classified as 'Repairing personal or household goods' - which most of us surely are - the new flat rate is 9%. This is effectively a 1.5% increase on last year's rate . . . something that has not been much trumpeted in the press or by HMRC. Although the consumer now has to pay the old rate of 17.5%, the business (supplier) has to pay an extra 0.5% on turnover, which either has to be absorbed, or added to prices.

 

Out of a list of 55 classifications, only one has not increased (Computer repair services - down 0.5%); the rest have all increased by between 0.5% and a whopping 3% (Agricultural services)!

 

It's may not be a lot in percentage terms, but I think it's a pretty sneaky way of implementing a VAT increase!

 

See http://www.hmrc.gov.uk/vat/start/scheme ... rate.htm#5

[Danny King]

Sneaky.. but i have noticed alot of retailers have put there prices up more than 2 1/2 percent and have blamed the vat increase. For excample my morning coffee has gone up 10%

[ironplanet uk900]

Biggest waste of money, is buying Coffee every time you fancy one, I make my own, for a millionth of the cost.

[Danny King]

Biggest waste of money, is buying Coffee every time you fancy one, I make my own, for a millionth of the cost.

 

We so too, Except for the first one in the morning

[keithm]

Biggest waste of money, is buying Coffee every time you fancy one, I make my own, for a millionth of the cost.

 

 

A millionth? Would that be the 'Baldrick' brand Mark? Milk and sugar sir? Yuk

[Guest lee.]

Sneaky.. but i have noticed alot of retailers have put there prices up more than 2 1/2 percent and have blamed the vat increase. For excample my morning coffee has gone up 10%

Ok so Vat on goods and services has gone up by 2.5% , but so have our overheads as well , VAT back up to 17.5% on our rent , which our landlords have also increased by another 10% , as well as increased stock costs ,and increasres on Fuel.

We would love to put our prices up but customers spit feathers at £4 for ladies heels and £2.50 for a Key already , so just means the VAT man ( yes we are registered ) gets a little more out of us again.