Accrington Web - View Single Post - Pound shops....be warned, a pure rip off!

archiveuk · 08-12-2008, 12:36

Hey Up, I know i don't post too often but when i do !!! anyway, The maths in the opening post are wrong, let me explain....

In order to apply the new rate of VAT, we need to take VAT at 17.5% off the previous selling price, then work out 15% on this value and add that back on. This means that the actual discount on the previous VAT inclusive price works out at about 2.13%.

Example:

A product priced on the shelf at £11.75 (inclusive of VAT). First take off the 17.5% previous rate of VAT (£1.75), this means the actual product price is £10 Now apply the new VAT rate of 15% to the £10 product price (£1.50), resulting in a new price of £11.50 The total reduction to the retail price is 25p or 2.13%.

.... i'll get my coat!

08-12-2008, 12:36	#14
archiveuk Full Member Join Date: Jun 2005 Posts: 99 Liked: 0 times Rep Power: 0	Re: Pound shops....be warned, a pure rip off! Hey Up, I know i don't post too often but when i do !!! anyway, The maths in the opening post are wrong, let me explain.... In order to apply the new rate of VAT, we need to take VAT at 17.5% off the previous selling price, then work out 15% on this value and add that back on. This means that the actual discount on the previous VAT inclusive price works out at about 2.13%. Example: A product priced on the shelf at £11.75 (inclusive of VAT). First take off the 17.5% previous rate of VAT (£1.75), this means the actual product price is £10 Now apply the new VAT rate of 15% to the £10 product price (£1.50), resulting in a new price of £11.50 The total reduction to the retail price is 25p or 2.13%. .... i'll get my coat!