VAT - what is happening?

[2point4kids]

Can somebody who knows please tell me quickly what the situation is with VAT?
Is it being reduced as of Monday? and how much by? and is it long term?

Thanks very much!!

Hi. VAT will fall from 17.5% to 15% on 1st Dec this year and will stay that way for 13 months. It won't make a massive difference - just saves you £2.50 for every £100 you spend. Enough info? The BBC website has some more detail if you are interested

for 12 months standard rate VAT is being reduced from 17.5% to 15%. Anythign you buy or invoice net of VAT (i.e. £100 plus VAT) will be cheaper; most stuff you buy in shops where the shelf price includes VAT "supposedly" will reduce. Other VAT rates are staying the same (except for those businesses using particular VAT schemes, eg Flat Rate VAT, whcih have their own changes).

Thank you

Every shop will have to trawl through and reduce each item by 2.5% also paper invoices will have a nice crossing out of the old VAT rate and a penned one put in place. Computer systems will have to be changed.

IMHO The government are trying to help but they haven't really thought it through. there is no VAT on food or childrens clothes or shoes, which is where alot of people need the extra help.

To be pedantic for every £117.5 you spend you will save £2.50 providing that retailers and firms pass all of the savings on

Agree with Furball. The idea is to encourage spending...but how saving a couple of quid on a £100 spend on "non-essentials" (ok, some stuff might be considered essential but ykwim) is going to encourage people who can't afford their gas bill & food to spend I have no idea

Surely prices should come down more as suppliers of the products will also be reducing the price of their goods to reflect the change in VAT? Bet they won't though....

Daisy i'm afraid not as VAT is only paid once as it is a value added tax. Companies can claim back the VAT they have paid already in buying supplies of goods and services.

Ah, didn't realise that.

Hate to tell people but most retailers won't be reducing prices at all- can't afford to as they will all have to pay for the expenses involved in changing the vat rate- ie accountants fees, changing software and re-programming etc!

Frankly it seems a pointless exercise for the majority.

It is however a good time to buy a reeeeallllly expensive car

We're hoping to do our extension next year - 2.5% on a lot = quite a bit (we hope)