AIBU to think that consumers won't see a penny of the VAT cuts?

[Hinckers]

Prices won't be cut and fat cats like Tim Martin will pocket the difference instead of passing it on to the consumer...

I agree that it probably won't get passed on to the consumer but, as well at Tim Martin, it will also be pocketed by small independent businesses who are having a really tough time

I think that’s quite cheeky, especially as all the signs are indicating we are in a V shaped recovery.

I don't mind the venues absorbing the VAT cut to be honest. They've been shut for months and are being forced to operate on lower capacity and extra costs due to PPE and more staff to provide table service.

They're going to struggle to stay in business so need all the help they can get. If you don't like Wetherspoons, go somewhere else, but I think it's far too early to predict a v shape recovery. Have you missed all the thousands of redundancies that have been announced already?

Venues keeping the VAT cut that is.

I don't think people understand that the VAT cut isn't really for consumers.
Most businesses are in red now so that's to help them get back up and be able to afford wages

I don't mind the venues absorbing the VAT cut to be honest. They've been shut for months and are being forced to operate on lower capacity and extra costs due to PPE and more staff to provide table service.

I totally agree with this. It doesn't bother me at all. I expect prices to go up to make up for changes that increase costs/decrease profits such as PPE and lower capacity.

I don't think people understand that the VAT cut isn't really for consumers.

This. I see it as a way for businesses to regain some of the money they've lost.

I also think it's fine for them to keep it

I've never not bought something because of Vat

The small niche business I work for will survive because of the VAT cut. They won't have to raise prices and therefore their consumers will benefit from static prices (we get A LOT of repeat customers). The VAT cut isn't aimed directly at consumers per say, so YABU. Its not cheeky, its business.

Interesting!

I thought the VAT cut was to lower prices to get customers out and spending...

I think it's supposed to be for the businesses, the Eat out scheme is supposed to be for the customers as I understand it...

No, the main aim is to keep businesses afloat, if it wasn't in place prices would rise to try and recoup some of their lost revenue. This way the consumer and the business benefit, the only loser is the government pot of money, but it is worthwhile investment wise.

DH and I have a set amount of money to spend on treats each month. Once it's gone it's gone. I won't be spending any more now that there's a VAT cut, if that's what the government were hoping for. But if prices went down it would mean I could spread my budget across several businesses rather than in just one or two more expensive purchases. However, I'm not expecting prices to go down. I expect businesses will want to pocket the saving to make up their shortfall.

"I've never not bought something because of Vat"

I'm sure you have. If the price was 20% more than you were prepared to pay you didn't buy it because of the VAT.

I don't think prices will be reduced either, which is OK. However, I also expect VAT to be added on to the "new" price when it's reintroduced and I'm not sure that's so OK.

. I won't be spending any more now that there's a VAT cut, if that's what the government were hoping for.

That's not the aim of it. Say you spend £20 on a meal, normally VAT would be 20%, so £4 of that would be VAT, and the business would keep £16. Now if you spend £20, they only pay 5%, so £1, and keep £19. It also means they are less likely to hike prices to try and recoup some money they have lost whilst they have been closed, as they are making more money at the same cost to the customer. Meanwhile you could use the eat voucher if you buy the same meal during an eligible time and they are participating, and pay £10 but they would still make £19.

Once it's gone it's gone. I won't be spending any more now that there's a VAT cut

It's to help businesses retain more money. So even if people shop as normal, the business can get bit more out of it.
If you spend normally (example) £100 in restaurant, VAT is £20. Now it will be £5. That's considerable difference. So instead of encouraging you spend that extra £15, the gov dealt with it this way.

Again. It's not for consumers. It's for business and subsequently their employees.

I would still probably rather have the first idea with spending voucher to ensure business are physically busier.

X posted

It’s to benefit businesses, letting them keep more money in the business. The consumer will also benefit though as it’ll help avoid some price increases.

If you spend normally (example) £100 in restaurant, VAT is £20. Now it will be £5.

No - if you spend £100, £16.67 will be VAT.

So let's say the meal costs £83.33, with 20% VAT the meal is £100. With 5% VAT, the meal is now £87.50 instead of £100.

I think that saving should be passed to the consumer to stimulate demand, but maybe I am the only one who thinks this!

I also expect VAT to be added on to the "new" price when it's reintroduced and I'm not sure that's so OK.

Mmm, good point @UltimateWednesday. So either way, the consumer loses!

I think that saving should be passed to the consumer to stimulate demand, but maybe I am the only one who thinks this!

Very possibly, yes...

As I have intentioned of ever setting for in a wetherspoons after Martin's disgusting comments and behaviour at the beginning of lockdown he'll get nothing from me.
Surely on of the big things from the last few months is how powerful our spending choices are?. Those small businesses who did new things, totally changed how they worked, supported their local community deserve our continued support. Money we spend their will continue to circulate in the economy, often quite locally, rather than go to stockholders in dividends and board members in 6 or 7 figure salaries.

Apologies for miscalculation 🙈
I started with 20 on top of 100, then moved onto not on top. Sorry. Made a right tit out of myself. Thank you for the correction.

But my point stands. This is NOT for consumers. That £12.50 makes a massive difference to business. And it's there, rather than imaginary encouraged consumer who wouldn't normally go. Plus, let's be honest here. That small difference would not make people go and spend where they normally wouldn't.

Unless it's a big sum like the original £500 voucher idea, there will be no extra customers

I am talking about expensive purchases btw. Not a cafe where the £10 voucher would encourage because you can get more for money

I am talking about expensive purchases btw. Not a cafe where the £10 voucher would encourage because you can get more for money

Isn't the VAT reduction just for the hospitality industry?