Quote:
Originally Posted by churchman phil
So my understanding that vat revenue didn't matter (as vat paid was offset by vat income, with the difference going to mr taxman if there was any left) is totally off the mark?? How can a supplier who charges vat increase prices when what we pay is cost plus vat - whatever amount vat is??
Please excuse me if I am wrong but if there is a cut in vat then what we pay for goods SHOULD drop too. If they don't then surely the shop/company/individual who sells the goods should be held to account for blatantly increasing their prices and therefore their profit??
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Spot on Phil, the energy companies for one have been doing it for years, the supply to them drops in price, but you dont see the benefit for months. So it follows that businesses get a drop in vat, if they drop the price at the checkout, you probably wouldnt notice anyway, and they have already suffered losses, so they will make up the losses, plus a bit, before they pass the vat reduction on, they will also sell on old stock at the old vat rate. But, just so you know, here is how vat works.. I buy something for the business at £100, the vat I pay is £17.50, even if I didnt put profit on (which at retail is 35%) then to sell the £117.50 on to you is plus vat, so you pay ££117.50 plus vat, equalling £138.06, the retailer pays £38.06 to the vat man and claims back £17.50, so you paid £38.06 to vat and the business claimed back £17.50, the vat man made £20.56 out of you!