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Cleaner suddenly put price up

(10 Posts)
m0rticiaaddams Thu 10-Mar-16 19:08:40

We've used the same cleaning service for the last 4 years. They charge a standard hourly fee for a weekly clean and do a good job (certainly better than me and DH can manage with two young DC and working full time) so we're happy to pay a reasonable amount to make sure that the place is cleaned properly every week, while we do the maintenance tidying and surface cleaning through the week.

The price has crept up over the last few years with an annual increase in line with inflation. At the beginning of the year it was £12.50/hr which is about standard for agency cleaners round here (London) as far as my limited research goes. It's noticeable in our weekly budget, but we feel it's worth it overall.

This month, the agency has suddenly increased the hourly fee by 20% (I think because they've hit the VAT threshold) so the weekly bill has gone up by a tenner, more or less. That may not sound like a lot but it adds up and it will have a knock-on impact on our household budget. I can't justify staying with this cleaning service when they're 20% more expensive than everyone else. I think they're going to lose a whole load of customers because of this, which is sad as they've been great so far.

AIBU to be a bit peeved by the sudden price hike and think there must be another way for small businesses to handle similar situations?

I'm not trying to get them to change their minds, but hypothetically, how could they have handled it differently? Or could they?

(This is relevant to me because I also run a small business and am very conscious about pricing and clients' perceptions of value. I'm also aware that if they're on the flat rate VAT scheme they'll actually be paying 12% on to hmrc but still charging 20% to customers)

Total first world problem, I know. But still.

Arfarfanarf Thu 10-Mar-16 19:09:55

Look for a less expensive company?

RubbleBubble00 Thu 10-Mar-16 19:10:25

Could it be minimum wage increase?

m0rticiaaddams Thu 10-Mar-16 19:12:06

Well, yes, we will be doing that. But I just wondered if this was standard practice - suddenly hiking prices up by 20% when you pass the VAT threshold. This must affect all sorts of small traders. What do they do?

m0rticiaaddams Thu 10-Mar-16 19:13:46

Rubble bubble - I asked the owner: she said its VAT.

MisForMumNotMaid Thu 10-Mar-16 19:14:58

Could you ask to keep the original price and reduce the workload. I.e. If they've been doing five hours cut it to four and rotate the cleaning so the core bits are done every week but periferals are alternated.

CosyNook Thu 10-Mar-16 19:23:26

Can you cut back to every other week, so your monthly costs are about the same?

Balletgirlmum Thu 10-Mar-16 19:27:07

Yes, when companies hit the VAT threshold they have to add 20% VAT onto their prices. They might have been able to absorb some of the costs but I suspect Living Wage & Auto enrolment have hit them too.

NotNowPike Thu 10-Mar-16 19:31:48

Small traders would have to do the same

Moominmammacat Thu 10-Mar-16 21:59:37

But can't the company reclaim the vat they are charged? So it shouldn't be that. Much of an increase ...

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