VAT changes passed on?
The Office of Fair Trading has conducted a survey of a wide range of larger businesses on Island to find whether they are passing on the 2.5% reduction in VAT to consumers.
The vast majority of businesses questioned are passing on the reduction. Because of the volume of work involved in changing individual price tags it will take some time for prices shown on price tags or shelves to be adjusted however tills have been programmed to charge the VAT at 15% instead of 17.5%.
Exceptions to this tend to be those businesses where the majority of goods sold are at the zero rate of VAT such as food or newspapers or those where an increase in the duty paid on the goods effectively cancels out any VAT saving such as transport fuel, alcohol or cigarettes.
Chairman of the Office of Fair Trading Bill Henderson MHK advises consumers “I made reference to this issue in the House of Keys this morning and I am very encouraged to find so many businesses are passing on the reduction. It’s a lot of work for businesses to change all price tags and I would ask consumers to be patient with the process of re-pricing individual items. If people are concerned that they may not receive the reduction they should ask before they buy if the prices have been reduced. If they haven’t and the items are available in another shop they may wish to take their business elsewhere.”