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Victory for Retailers in VAT War
Listed under: News
Published: Thursday, December 10, 2009
Independent retailers across the country will be breathing a sigh of relief this week following the Government announcement that they will be given four weeks, instead of two, to update the price labels in their stores after the VAT rate change comes into force on 1st January.
The move – which will see the controversial tax return to its previous rate of 17.5% – has been widely criticised by the retail industry, with many business support groups accusing the Government of placing unnecessary pressure on companies at the worst possible time.
The law currently gives retailers a period of just two weeks to update their pricing following a change in VAT – something which is often impossible for businesses with large amounts of stock, such as bead shops and establishments selling yarn. The new four-week guideline will be permanent and apply to all future VAT rate changes.
Commenting on the new scheme, Stephen Robertson, director general of retail support group, the British Retail Consortium (BRC), which has been campaigning for a change in the law, says, “This is a victory for the BRC. It's come late, but this change will give retailers more time to achieve this huge, costly exercise without undermining their key mission, especially at sales time – serving customers.
He adds, "Repricing thousands of items and updating IT systems is a major undertaking and will have to be done during most business's busiest and most commercially important times of year. Retailers will be doing all they can to minimise any customer confusion by re-labelling quickly, but they now have the option of leaving the job until later in January, when shopper numbers are lower and staff are under less pressure.”
How do you think the VAT rise will affect your business this Christmas? Email your thought to .(JavaScript must be enabled to view this email address)
The move – which will see the controversial tax return to its previous rate of 17.5% – has been widely criticised by the retail industry, with many business support groups accusing the Government of placing unnecessary pressure on companies at the worst possible time.
The law currently gives retailers a period of just two weeks to update their pricing following a change in VAT – something which is often impossible for businesses with large amounts of stock, such as bead shops and establishments selling yarn. The new four-week guideline will be permanent and apply to all future VAT rate changes.
Commenting on the new scheme, Stephen Robertson, director general of retail support group, the British Retail Consortium (BRC), which has been campaigning for a change in the law, says, “This is a victory for the BRC. It's come late, but this change will give retailers more time to achieve this huge, costly exercise without undermining their key mission, especially at sales time – serving customers.
He adds, "Repricing thousands of items and updating IT systems is a major undertaking and will have to be done during most business's busiest and most commercially important times of year. Retailers will be doing all they can to minimise any customer confusion by re-labelling quickly, but they now have the option of leaving the job until later in January, when shopper numbers are lower and staff are under less pressure.”
How do you think the VAT rise will affect your business this Christmas? Email your thought to .(JavaScript must be enabled to view this email address)
