VAT decrease - worth the wait ?

Hmmm, thanks for the heads up Chris!
I would place an order today but my central heating has packed up and is going to be very expensive to repair I fear - a leak somewhere under the floor. I'm just hoping it's under the wooden floor, not the concrete one.

I wonder how many unscrupulous retailers will not reduce their prices by an appropriate amount and then in January 2010 will increase them by 2.5% rather than 2.17% and also add some rounding.




p.s.

This is NOT a dig at Chris (SRS)

I see that Amazon are reducing their prices - just had an email from them. Not that it helps me as I can't order electronics etc from them, only books.

Polchraine what a cynic you are! You are probably right though

I work for an online retailer selling small items which are generally less than £10 in value. We have 500 product lines. We are not/cannot change the prices of all these products by 2.5% it would take us a week to do this because of the nature of our database and accounting software. It would make little difference to the customer shaving a few pence off inexpensive items, so we will adjust our prices on any products over £20 where a 2.5% difference may be appreciated.

This really is the wrong time of year for such a tax change for small businesses, it is usually our busiest month and all hands to the pumps as it were. We don't have the spare capacity to mess around with protracted administration chores. All the changes we will make have to be done late Sunday evening, unpaid overtime. I just love it.

If the government wanted to give more money to people then reduce the direct tax burden by lowering income tax or increasing allowances. Trifling with the VAT rate is just fiddling while the flames get nearer.

By the way, I'm an excellent Chancellor of the Exchequer in my spare time and I've also emmigrated three times this year.

(written during my tea-break whilst our customers wait for Monday :wink

I've just received a refund from Amazon for £0.01 (yes, one penny) because the price of my pre-ordered item has reduced before release.

This is honesty for sure, but taking things to extremes IMHO. Whatever it cost them to process this credit card refund I would have been happy for them to keep, and the penny as well.

It may well be that they will process VAT refunds in the same way, we'll find out soon!

mmmmm...all my worrying about 'wee free memory cards' does seem a trifle unimportant when you take in the bigger picture for small businesses etc. Over brekkie I did realise that as a surfer and a tight fisted jock even I will pay a bit over the odds to support a couple of Norfolk surfshops and I guess in photographic market there must exist the same shop loyalty too. Problem is that I'd love to support our local camera store too but they are just sooo much more expensive than some of the recommended places you see here...
anyway I'll go back to what I understand fully - which is dodging the DIY (sorry to hear about your central heating Gwyn )and preparing for my (so far) recession immune, research nurse job.
take care
CJ

Shops will reduce their prices by passing on the VAT saving to the customer when competing shops do the same. Of course it won't happen immediately with all items in all shops, but prices in general will gradually fall.

Many of us feel that we do support our local shop by buying from SRS, even though for most of us, Chris is a long way from actually being local

Hi all,

interesting video explaining how the money markets actually work.. no really, it's fascinating..

For instance, I can start a bank with just over a grand in real money, and invent (eventually) around £100k in non-existant money, from that perfectly legally.

http://theobvious.typepad.com/blog/2008/10/money-as-debt.html

Cheers

Liam

In fact that isn’t true; in order to start a bank you need to first meet capital adequacy ratios and be regulated by the Bank of England and the Financial Services Authority.

Rules and regulations in this area are supposed to ensure that banks are financially sound and operate their business accordingly, and while there has recently been a clear breakdown not only in this respect but also in private sector risk controls generally, this means nothing more than a collective failure, and certainly not a systematic deficiency in the money creation mechanism.

As for the video, I didn’t have to watch it very long to realise that it is a rehash of the many and varied claims emanating from the goldbug community, who as a rule are sadly more than a few doubloons short of a full treasure chest.

Therefore I can only deal with the one specific sensationalist claim I did see, that money is a debt; of course it is, if nobody had to deliver against the debt it would have no value, just as an IOU would have no value if you wrote it out to yourself. It is however, ultimately secured by the real assets of economy wide participants: companies, factories, houses, even the odd piece of shiny jewellery.

However, in respect of the latter it must be said that in the era of explicitly gold-backed currencies the incidence of financial instability measured by market panics and crashes was far, far greater than under the modern system, which is a fact that golbugs rarely if ever mention.

If you want documentary and fairly dispassionate proof of that I would recommend Charles Kindleberger’s excellent “Manias, Panics, and Crashes: A History of Financial Crises”. See
http://www.amazon.co.uk/Manias-Panics-Crashes-Financial-Investment/dp/0471467146

Was in the london Camera Exchange in Lincoln yesterday, they had reduced their prices by the VAT element & also had 10% of all Pentax lenses & bodies. making the DA*50-135mm £440 before the cashback sum, now that has to be a bargain