0370 270 6000

already registered?

Please sign in with your existing account details.

need to register?

Register to access exclusive content, sign up to receive our updates and personalise your experience on brownejacobson.com.

Privacy statement - Terms and conditions

the VAT rise, a rock and a hard place

7 January 2011

As we all know and have no doubt complained about at some point the rate of VAT increased on 4 January 2011 from 17.5% to 20.0%. Although it will increase their expenditure, this might not deter consumers from most small purchases. For example if an item costs £100, the raise only equates to a £2.13 increase.

But for retailers, the increase creates a particular dilemma. The Price Marking Order 2004 requires all retail businesses selling to consumers to display their prices inclusive of VAT. These businesses therefore have 2 options:

  1. continue with their current prices, and absorb the difference (for now at least), or
  2. change the price of all of their non-VAT exempt goods, and incur potentially significant costs in terms of re-pricing, amending till systems and other costs.

The answer will be different for each business and product. Retailers should consider with what changes their customers are willing and able to cope.

related opinions

More protection required for retailer workers as violence is on the rise, according to latest statistics

Following an MP debate on 5 November 2019, the government is due to release long-awaited guidance as to how it intends to protect workers in the retail industry against violence, harassment and abuse.

View blog

UK universities receive fire and safety complaints

Statistics released by Eaton indicate that 1 in 4 Universities have received complaints about fire safety issues or building evacuation procedures from students, staff or members of the public in the last 5 years.

View blog

Care Charitable Trust fined after Resident suffers fatal fall

Nazareth Care Charitable Trust which operates a care home in Bonnyrigg, Scotland, recently received a fine after a resident at one of its care homes suffered a fatal injury after falling down a flight of stairs.

View blog

Election implications for IR35

Draft legislation has already been produced to replicate the 2017 IR35 changes within the public sector and extend these to medium and large private sector organisations, with the final legislation previously expected this month.

View blog

mailing list sign up



Select which mailings you would like to receive from us.

Sign up