The Office of Fair Trading wishes to make consumers and businesses aware of the price marking implications of the standard rate of VAT returning to 17.5 per cent on 1st January 2010 from the temporary rate of 15 per cent introduced on 1st December 2008.
The increase does not apply to items which were not subject to the decrease in rate.
Businesses seeking advice on how to indicate prices following the increase can contact the Office for advice.
Because of the volume of work involved in changing individual price indications it may take some time for prices shown on price tags or shelves to be adjusted, however, tills should generally be programmed to charge VAT at the higher rate without undue delay.
Businesses are reminded of Part 3 of the Code of Practice on Price Indications in the Isle of Man—
“3.4 Changes in the rate of value added tax.
3.4.1 When prices change due to a variation in the rate of VAT you can, for a period of 14 days from the date that the change takes effect, use a general notice or notices to indicate the adjustment necessary in prices. This period is given to allow you time to change your price indications.
3.4.2 If your price indications become misleading because of a change in the rate of VAT, make the correct price clear to any consumers who order products. Do so before the consumer is committed to buying the product and, wherever practicable, before the goods are sent to the consumer.”
Copies of the Code of Practice are available from the Office or can be downloaded from the Office’s website (http://www.gov.im/lib/docs/oft/codeofpracticeonpriceindication.pdf).
Businesses seeking advice on how to account for the increase should contact VAT Advice on 648130.
Chairman of the Office of Fair Trading Bill Henderson MHK advises consumers ”I am sure that businesses will try and make the change over as smooth as possible but if anyone has any concerns with the way that the VAT has been charged they should contact this Office on 686500”.