Quote:
Originally Posted by DNSB
@paulsalter: Did you bother to read the entire post before replying? Play special attention to the bolded sections in the quotes above.
|
I did yes, the product cost is irrelevant for the scenario we are talking about
Using the figures you show as they are easier to work with
Retailer sets the price at £100, this is based upon all the costs of the product (including the VAT)
I pay £100 when i buy this
With VAT at 20%, the retailer will pay the government £20
Now lets say that the VAT rate drops down to 10%
There is no automatic reduction of the price this product is sold to the customer, though the Retailer can increase to take this into account
So unless the retailer changes things, this product is still selling at £100
I pay the retailer £100
With VAT now at 10%, the retailer will pay the government £10