Is my corner shop scamming VAT?

[GarlicRound]

Or am I being unusually thick??

The only way I can make this work is if tax is registered for the biscuits, crisps & tobacco (total £24.74) but not the cigarettes (£14.60).

If they are cheating, would you dob them in? It's a tiny shop run by a youngish couple.

i think jumping to ‘shall I report them’ based on one receipt is quite something.

I would.

I rarely ask for a receipt - and I'm not about to set myself up as an amateur tax inspector 😂 But I've paid the tax, it should really go to the public coffers.

Yes probably

Most retail shops are a front for money laundering imo, noone can afford to be in business these days 😭😭

See Peacocks 🤷‍♀️

They have zero rated the purchase that cost £14.60.

Scamming vat would be chatging you it then not declaring to hmrc.

I'm a suspicious bugger, why have you hidden the items? Is the 14.60 item something actually zero rated and you're just this bored?

Most of them?

I'm curious about the amended receipt as well. But, if it's just to hide more details, it looks like the till is programmed to zero rate the cigarettes. That would, possibly, be a deliberate act.

I was wondering if it's to do with all the excise duty on it.

this is what my friend online says:

UK tills often hide the VAT on tobacco

Many UK POS systems put cigarettes in a “tobacco/excise goods” category that prints as:

VAT 0%

EXEMPT

Z-rated

This is only a display choice. UK law includes VAT in the retail price, but tobacco prices are already tightly controlled and contain:

Excise duty (very high)

VAT (20%)

Because excise duty dominates the cost, some retailers choose not to break out VAT on receipts.

No, I hid them in case they saw the thread! The cigarettes are already 50p more than I pay for the same ones at the supermarket, so I have paid the tax.

Yep

How is wh smiths still going? Noone shops there sorry

Asda are scamming us with their prices

Its all a mess

(I am being slightly hyperbolic ofc)

The fags have duty not VAT I’d imagine. You couldn’t have cigarettes as a product category without the relevant tax without HMRC spotting it.

If it's no legit..I don't think they would list them as cigarettes! It would be non scan item or something

I don't understand that, @Hello39

Ah, good point! Thanks.

There's Vat and excise duty on them. I wonder where they're sourcing the cigarettes from?

They'd be pretty daft to try to.scam HMRC out of tobacco tax, while still referring to cigarettes on the receipt!

The price of a pack of 20 cigarettes in the UK is made up of the base cost of the cigarettes, plus excise duty, and Value Added Tax (VAT). The excise duty is calculated as a percentage of the retail price plus a specific amount, and VAT is applied to the total after the excise duty is added. For a pack of 20 cigarettes, the duty is (16.5%) of the retail price plus a fixed amount of £6.69, and VAT is then calculated on the final price.

Because VAT is added on top of duty, a big chunk of the VAT you pay is effectively VAT on excise duty, not VAT on the product itself.

Basic till systems might not be able to show all this. It can calculate the VAT—but it will not display it to customers for cigarettes
Instead it shows “0% VAT” even though VAT is baked into the price.

This is standard and legal.

Thank you, @Hello39 🤗 As a bonus, you've just confirmed that my stinky addiction is keeping the UK economy going!

It may just be a simple coding error on entering that particular brand of cigarettes - at work when we get a new product we have to enter all the details and select the VAT or zero or exempt VAT accordingly. Love it when the manufacturers send it over as a file we can import as it is easy to make a mistake.

VAT is included, but hidden, because:

1. Cigarettes must legally include VAT
2. Tobacco duty is already included in the price
3. Showing two separate taxes would confuse consumers
4. Pricing rules require a single, all-in displayed price
5. It supports anti-smoking public health policy by making cigarettes expensive and taxes unavoidable

I suspect someone has entered the tax rate incorrectly. You could tell them if you can be bothered. If they don't notice they could end up with a bit of a bill from HMRC.
Either way, they're not scamming you. The VAT would be nearly £3 and they have charged you nothing.
If it's an HMRC scam, it's the stupidest one I've ever seen (VAT inspector in a previous life).

£14.60 for a packet of cigarettes!

WHSmiths is propped up by their station and airport shops. The big ones near me have either closed or halved in size.

I suspect it's because vat on tobacco products is not reclaimable by a customer, as there is no legitimate business use.