[gynn]

Originally Posted by flashy

BBC News - Who, What, Why: What happens to £9.99 when VAT rises?

The standard rate of VAT has gone up from 17.5% to 20%. What will this mean for the familiar "price points" to which consumers are accustomed?

It probably means that a £9.99 item will go up to £10.99. Not a 2.5% increase, but a 10.1% increase.

And if anyone charges you an extra 2.5% claiming it is the VAT increase, then they are conning you.

For example, if the charge is £10.00, they might put it up to £10.25. However, the £10.00 was made up of £8.51 plus £1.49 VAT. The new charge should be £8.51 plus £1.70 VAT = £10.21.

Not a lot, you might think, but a nice little earner for the supplier.