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#121 | |
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This is the part relating to what we are talking about, the first option is the one the publisher has selected for the book we are talking about Retailers, who normally show VAT inclusive prices on price tags, will have two choices: to leave prices at the pre-VAT reduction levels – this will increase their profits on items sold or reduce their prices – thereby passing on the VAT reduction to their customers. https://totalaccounting.co.uk/what-h...s-are-changed/ |
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#122 |
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#123 |
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If I had a choice, I'd rather the VAT go to the government then into the pockets of the greedy publishers.
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#124 |
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#125 |
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#126 |
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@Jon and @pajamaman
You are both misunderstanding how VAT works. You are conflating it with a sales tax. Prices in the UK and Europe have to include VAT on the price sticker and companies are recommended to NOT show an ex VAT price. To a retail customer the price on the sticker is the price you pay regardless of what the VAT is. On some items it's zero rated, some are 5% and the vast majority are 20% however to the consumer THIS DOES NOT MATTER. VAT is paid all along the chain from manufacturer to consumer and by all of the middlemen along the way. Although the consumer is the one that ends up paying it in the end as far as they are concerned it's invisible. Companies are under no obligation to reduce their prices if VAT changes (although a lot of them do), yes it's a crappy situation but that doesn't change the fact. The price on the sticker is the price you pay, end of. The company that sold it to you then has to pay any taxes required out of that price paid, it's all invisible to the consumer. Again VAT is NOT a sales tax, it's a tax on value added at every point along the chain. An example, milk is zero rated for VAT in the UK so buying a pint of milk attracts no VAT. Cheese however which is made from that milk has had value added to it by the process to change the milk in to cheese so it attracts a 20% VAT charge. If VAT was a sales tax then that tax would also be on the milk at point of sale, as it's a Value Added Tax it's not. Again VAT is NOT a sales tax and you are confusing the two. Is it confusing YES, is it wrong that companies don't pass on the change, morally probably, lawfully no. It might seem like the companies have raised their prices due to the removal of VAT but they haven't as VAT is not a sales tax. Yes it's confusing but that doesn't make you any less wrong. And as to the point of prices being automatically raised if VAT increases, they don't again the price on the sticker is the price paid, regardless of the VAT amount. Now that's not to say companies don't raise their prices if VAT increases because they do but it's not automatic like it would be if it was a sales tax. They would have to relabel all of the prices to increase them. There's a fairly decent simple explanation here https://www.bbc.co.uk/news/explainers-53334098 |
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#127 | |||
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It's not as if in most cases, the government suddenly comes out and says the VAT rate will be changing as of midnight tonight though the ebook VAT cut was brought forward 7 months from it's original implementation date. Of course we all know that politicians don't always mean what they say but such quotes as when Oliver Dowden said (bolding mine) suggest that it was expected for the VAT relief to be passed on to the consumer: Quote:
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#128 | |||
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Correct, the price has not changed. The amount of tax the company you bought it from pays changes but the price you pay doesn't. I'm failing to see why this fact is so hard to grasp? This isn't aimed at you personally by the way I'm meaning in general. Quote:
Who's claiming VAT isn't a tax? It is a tax, what it isn't is a sales tax. This seems to be what most people are misunderstanding. A sales tax is only placed at the end of the chain where the item is sold, VAT is charged all along the chain. Quote:
You didn't read what I wrote, you've just basically said the same thing I did, at no point did I say that companies wouldn't raise the prices, I said it's not automatic. You've basically just said the same thing "the shelf prices would be replaced instantly" (paraphrased) implying that the prices have to be changed manually... because they do, it's not automatic. Most if not all companies WOULD increase their prices because of a VAT change but it's a manual process. |
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#129 |
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The difference between VAT and US sales tax is that VAT has to be included in the price. Sales tax is added at point of sale.
Both are a tax. If you reduce the tax to 0%, then the prices should be lower as you won't be paying this tax. How is it hard to believe that if you remove the tax, the price is lower. The fact that it's not lower is because the company decided to raise the price. |
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#130 | |
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No that isn't the difference VAT != Sales Tax You are correct in that Sales Tax is added at the point of sale, and that VAT is included. The reason VAT is not added at the point of sale is because it's added all along the chain and even more confusingly can be different amounts at different points in the chain depending on what value you are adding and what tax rate that value attracts. Lets just agree that Taxes are complicated and DIFFERENT in different countries and leave it at that. |
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#131 | ||
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https://en.wikipedia.org/wiki/Price Quote:
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#132 | ||
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As for changing the price manually, that would only happen in a B&M shop that is not using a computerized scanning system and there aren't many of those left in my area. Online shops and most B&M shops will change their pricing in the store's management computers. In this area, quite a few of the shelf price tags in B&M shops are also computer driven so a few milliseconds to change them. As long as the price at the cash register is lower than the marked shelf price, there is no issue. |
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#133 |
Is that a sandwich?
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Would Amazon's 30% commission be calculated before or after the VAT?
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#134 | ||
Bibliophagist
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Quote:
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#135 | |
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But then not sure if the contracts in the UK made sure that Amazon's profit margin was exactly 30% of sticker pricr regardless of VAT rate. |
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