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What should be done with the 2.5% VAT reduction - Poll

Superuser
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What should be done with the 2.5% VAT reduction - Poll

I personally think the second option. Be interesting to see what others think.
Regards
Mike
Mike
40 REPLIES
Community Veteran
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Registered: 05-04-2007

Re: What should be done with the 2.5% VAT reduction - Poll

Sorry, don't understand the question. The nett price as not changed only the VAT on that price. Are you asking that Plusnet put their prices up to invest in the infrastructure? If so, what happens when the the VAT goes back up again at the end of 2009?
pierre_pierre
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Re: What should be done with the 2.5% VAT reduction - Poll

Moderator
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Re: What should be done with the 2.5% VAT reduction - Poll

Definitely give it back; after all, PN won't be putting their hands in their pockets to help their customers with the increase in NI, petrol, etc, which, by the way, will be permanant unlike the 13 months for the VAT decrease.

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Community Veteran
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Re: What should be done with the 2.5% VAT reduction - Poll

It will be interesting to see what other ISP do. Plusnet have taken a lead and are reducing their prices. But those ISP with large advertising campaigns are not going to find it so easy as they will have to reprice their adverts. (And I bet the extra cash does not go into improved service).
Another interesting point will be what happen at the end of the 13 months, will Plusnet (be able) put the price back up?
Superuser
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Re: What should be done with the 2.5% VAT reduction - Poll

In 13 months time the ISP industry probably be a fairly different sceane any way!  Think back over the last 5 years at the changes that have happened.
Phil
glloyd
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Re: What should be done with the 2.5% VAT reduction - Poll

If they don't adjust the VAT they would have to adjust the net price to keep the same price as you can't charge more than the legal VAT rate
Community Veteran
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Re: What should be done with the 2.5% VAT reduction - Poll

The aim of the VAT cut is to stimulate the economy by enabling people to buy more.
So the cut should be passed on to customers.
Moderator
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Re: What should be done with the 2.5% VAT reduction - Poll

Quote from: HPsauce
The aim of the VAT cut is to stimulate the economy by enabling people to buy more.

Not too sure, yet,  what I will actually buy with my 63.8p per month saving Wink

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Midnight_Caller
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Re: What should be done with the 2.5% VAT reduction - Poll

I personally have gone for the second option.
driveconsultant
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Re: What should be done with the 2.5% VAT reduction - Poll

We shouldn't be having this debate at all. This money is not PlusNet's to spend. Anything other than a 2.5% reduction would amount to a price increase.
Moderator
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Re: What should be done with the 2.5% VAT reduction - Poll

@driveconsultants
Come on, what's your problem, you'll only fritter it away on cold beer, women, fast cars and foreign holidays Wink Smiley

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puddy
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Re: What should be done with the 2.5% VAT reduction - Poll

My partner works for HMRC so this is not plusnet money it belongs to the Government.
When I asked her she stated most supplier will not adjust for the VAT cut but keep the extra 2.5% for profit for themselves
Puddy
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Re: What should be done with the 2.5% VAT reduction - Poll

Quote from: driveconsultants
Anything other than a 2.5% reduction would amount to a price increase.

Actually, a drop of 2.5% in VAT is roughly a drop of 2.13% in real terms off the gross price Smiley
Quote from: puddy
My partner works for HMRC so this is not plusnet money it belongs to the Government.
Puddy

Can't see how that is correct. How can the amount VAT has been reduced by still belong to the government?
I agree, though, that It'll be extra profit for the suppler. I really don't think suppliers/retailers will bother to adjust all their prices to benefit the buyer. You'll probably just see prices rise by a little over 2% for most smaller-priced items. Of course, the difference in larger-priced items willl be more noticable so the suppliers would then more likely be forced to offer it back to the buyer/consumer.

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gswindale
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Re: What should be done with the 2.5% VAT reduction - Poll

Not sure how I as a non VAT registered customer would see a price increase?
Take a TV on sale at £117.50 (inc VAT).  I'll pay £117.50 to Comet (for instance), and they'll give £17.50 to HMR&C at the moment.  From Monday, I'll likely still pay £117.50 (as they won't reduce the cost), however they'll pay £15.33 to HMR&C.
For VAT registered customers, there'll may be a difference in the amount they actually pay (in the above example, £102 v £100).
This is not the case in all scenarios.
For rents etc, the net is fixed, so those who aren't VAT registered and occupy a VAT-elected property will see a saving.