The government’s VAT cut doesn’t take effect until Monday, but one online retailer just couldn’t wait and has already introduced it.
Amazon has created a promotional code called “LOWERVAT” that’ll give you a reduced rate of VAT instead of the full 17.5 per cent.
Presumably Amazon’s decided to take a small financial hit on each …
I believe Amazon have a, somewhat hidden, policy that if the price of something you have bought from them goes down within a specific period you can claim a refund to take you to the lower price. I wonder if that would also apply in the case of items bought before the VAT is reduced compared to prices after?
"Firstly, the retailer’s only reduced the VAT rate by 2.13 per cent and not the full 2.5 per cent. Why? Well because of some complicated mathematical mumbo jumbo, it claimed."
It's not too complicated. For example, if you have £100 and add 10% you have £110. Subtract 10% of £110 (i.e. £11) and you're left with £99, not your original £100.
I just placed an order for a car at the new rate of VAT, the order is placed, it's just not going to go on the books until Monday ;)
Any reasonable retailer will make that kind of deal, it just doesn't make sense to wait, otherwise people will just hold off on purchases. Which makes the books look even worse than they probably are.
Clever because if they didn't do it via the promo code, you would have been able to take advantage of their generous price-drop-refund scheme several days earlier :)
But loads of retailers have done this already, Amazon don't deserve this mention tbh. Overclockers for one went down to 15% almost immediately after it was confirmed.
I assumed these retailers aren't taking the hit, but rather doing a bit of an accounting fiddle so these orders look like they came after the weekend? Who knows...
As there's a little confusion about the fact it's not a 2.5% reduction in the cost, there's an easy calculator for the VAT change here: http://howmuchvat.co.uk/
What's the betting Alistair Darling's grasp of maths is just as questionable?
http://news.bbc.co.uk/1/hi/scotland/7749515.stm
In summary, our worthy chancellor and the man best placed to get us out of our current mess, oh yes, cocked up a rise in the duty on spirits supposed to exactly negate the VAT reduction, and spectacularly failed.
SVP are also offering a discount until 30th November, I think it's 2.5% off or something. Sods law I just ordered some bits from them and I aint putting in a special order just to get the discount.
Brastop.com are currently offering 17.5% off until November 30th which spurred my other half to get some new sexy undies. Good on you Alistair, in a way you've spurred my other half to spend out on something that in a way will make my day.
Paris because I bet she's got a selection of sexy undies.
"I believe Amazon have a, somewhat hidden, policy that if the price of something you have bought from them goes down within a specific period you can claim a refund to take you to the lower price. I wonder if that would also apply in the case of items bought before the VAT is reduced compared to prices after?"
Amazon discontinued this policy a few months ago (except for pre-order items) :(
Isn't VAT a legal requirement? If so, then Amazon cannot simply decide to reduce the amount of VAT paid - that would be illegal. All they've done is reduce the amount charged to the customer - the amount of VAT on those goods is still 17.5%.
"I believe Amazon have a, somewhat hidden, policy that if the price of something you have bought from them goes down within a specific period you can claim a refund to take you to the lower price."
Amazon have now dropped this policy. I tried to claim a refund last week and got the following response:
"Further to your email, we regret to inform you that we do not extend a post-order price guarantee and only orders placed on or before September 01, 2008 are eligible for a price difference refund under the Post-Order Price Guarantee policy. We are very sorry regarding this issue."
However, I pre-ordered a DVD from Amazon which was released on Monday. As the supermarkets were selling it at a significantly lower price than Amazon they have given me a fiver refund.
Register
Amazon intros early VAT cut
The government’s VAT cut doesn’t take effect until Monday, but one online retailer just couldn’t wait and has already introduced it. Amazon has created a promotional code called “LOWERVAT” that’ll give you a reduced rate of VAT instead of the full 17.5 per cent. Presumably Amazon’s decided to take a small financial hit on each …
This topic is closed for new posts.
Posted Wednesday 26th November 2008 15:54 GMT
Anonymous Coward
oh bum #
I'd just done most of my Xmas shopping on Amazon too. Ah well, it would only have saved me the price of a pint. Life goes on.
Posted Wednesday 26th November 2008 16:32 GMT
Paul
Refund if price goes down #
I believe Amazon have a, somewhat hidden, policy that if the price of something you have bought from them goes down within a specific period you can claim a refund to take you to the lower price. I wonder if that would also apply in the case of items bought before the VAT is reduced compared to prices after?
Posted Wednesday 26th November 2008 16:32 GMT
Flugal
Mumbo jumbo? #
"Firstly, the retailer’s only reduced the VAT rate by 2.13 per cent and not the full 2.5 per cent. Why? Well because of some complicated mathematical mumbo jumbo, it claimed."
It's not too complicated. For example, if you have £100 and add 10% you have £110. Subtract 10% of £110 (i.e. £11) and you're left with £99, not your original £100.
Same principle applies.
Posted Wednesday 26th November 2008 16:32 GMT
Oliver Humpage
It is the full 2.5% #
If you reduce the VAT on an item from 17.5% to 15%, that's the same as applying a 2.13% discount to the original "inc VAT" price.
So they are giving you the full VAT discount, but by reducing the total price by 2.13%. Makes perfect sense.
Posted Wednesday 26th November 2008 16:34 GMT
Anonymous Coward
Car #
I just placed an order for a car at the new rate of VAT, the order is placed, it's just not going to go on the books until Monday ;)
Any reasonable retailer will make that kind of deal, it just doesn't make sense to wait, otherwise people will just hold off on purchases. Which makes the books look even worse than they probably are.
Posted Wednesday 26th November 2008 16:34 GMT
Gareth Jones
Bit slow #
They're behind wiggle.co.uk
Posted Wednesday 26th November 2008 16:34 GMT
H3N0451
They're not the only ones #
Online cycle shop Wiggle have also put their rates down to 15%:
http://www.wiggle.co.uk/h/option/VAT
Posted Wednesday 26th November 2008 16:34 GMT
Craig
Clever #
Clever because if they didn't do it via the promo code, you would have been able to take advantage of their generous price-drop-refund scheme several days earlier :)
But loads of retailers have done this already, Amazon don't deserve this mention tbh. Overclockers for one went down to 15% almost immediately after it was confirmed.
I assumed these retailers aren't taking the hit, but rather doing a bit of an accounting fiddle so these orders look like they came after the weekend? Who knows...
Posted Wednesday 26th November 2008 16:48 GMT
Eddie Edwards
You're not ... #
You're not going to tell me that this is bad because they don't offer the VAT reduction on books, are you?
Posted Wednesday 26th November 2008 16:48 GMT
Anonymous Coward
@Flugal #
Some more math is needed:
Your Price: VAT: VAT Amount:
£115 15% £15
But £15 is *not* 15% of £115, it is 3/23 of £115.
You can work the VAT fraction out:
Tax Rate
-----------------
100 + Tax Rate
So, VAT at 15%, the fraction is:
15 = 3
--- --
115 23
It used to be 7/47ths now it is 3/32rds
Regards,
SW
Posted Wednesday 26th November 2008 17:24 GMT
Dogbyte
Call me cynical... #
But if they didn't do this nobody would buy anything until Monday.
Mine's the one with the firmly closed wallet in the pocket.
Posted Wednesday 26th November 2008 17:24 GMT
Anonymous John
What happens if you use the code, next week? #
Do you pay tax of 12.5%?
Posted Wednesday 26th November 2008 17:24 GMT
Anonymous Coward
is 32rds... #
....pronounced like thirty turds?
Posted Wednesday 26th November 2008 17:24 GMT
Ben Mathews
Also... #
www.overclockers.co.uk have been at 15% since the announcement.
Posted Wednesday 26th November 2008 17:35 GMT
Stu
Easy Calculator #
As there's a little confusion about the fact it's not a 2.5% reduction in the cost, there's an easy calculator for the VAT change here: http://howmuchvat.co.uk/
Posted Wednesday 26th November 2008 17:35 GMT
Stuart
Free Money (if you are vat registered...) #
Ahem - they will still charge you 17.5% on a reduced pre-vat price. So if you are VAT registered you still get 17.5% back. A double discount ;-)
Posted Wednesday 26th November 2008 22:37 GMT
David Gosnell
Not the only one? #
What's the betting Alistair Darling's grasp of maths is just as questionable?
http://news.bbc.co.uk/1/hi/scotland/7749515.stm
In summary, our worthy chancellor and the man best placed to get us out of our current mess, oh yes, cocked up a rise in the duty on spirits supposed to exactly negate the VAT reduction, and spectacularly failed.
Posted Wednesday 26th November 2008 22:40 GMT
Rob Beard
SVP and brastop.com #
SVP are also offering a discount until 30th November, I think it's 2.5% off or something. Sods law I just ordered some bits from them and I aint putting in a special order just to get the discount.
Brastop.com are currently offering 17.5% off until November 30th which spurred my other half to get some new sexy undies. Good on you Alistair, in a way you've spurred my other half to spend out on something that in a way will make my day.
Paris because I bet she's got a selection of sexy undies.
Rob
Posted Wednesday 26th November 2008 22:40 GMT
Anonymous Coward
Pahhh #
Pixmania are giving 2.5% off
Use the code VATCUT to get your 2.5% OFF EVERYTHING
Posted Wednesday 26th November 2008 22:40 GMT
Anonymous Coward
@Anonymous Coward #
Yes when it comes to VAT it is always turds! And my mistake it is 3/23rds :P~
SW
Posted Wednesday 26th November 2008 22:40 GMT
Elrond Hubbard
definitely not the first to do this #
I saw overclockers do an early VAT drop last week, then wiggle a couple of days ago - now amazon.
Posted Wednesday 26th November 2008 22:40 GMT
Anonymous Coward
Not any more... #
"I believe Amazon have a, somewhat hidden, policy that if the price of something you have bought from them goes down within a specific period you can claim a refund to take you to the lower price. I wonder if that would also apply in the case of items bought before the VAT is reduced compared to prices after?"
Amazon discontinued this policy a few months ago (except for pre-order items) :(
Posted Wednesday 26th November 2008 22:40 GMT
Anonymous Coward
Just PR #
Isn't VAT a legal requirement? If so, then Amazon cannot simply decide to reduce the amount of VAT paid - that would be illegal. All they've done is reduce the amount charged to the customer - the amount of VAT on those goods is still 17.5%.
Posted Wednesday 26th November 2008 22:40 GMT
Phil
Re: Refund if price goes down #
"I believe Amazon have a, somewhat hidden, policy that if the price of something you have bought from them goes down within a specific period you can claim a refund to take you to the lower price."
Amazon have now dropped this policy. I tried to claim a refund last week and got the following response:
"Further to your email, we regret to inform you that we do not extend a post-order price guarantee and only orders placed on or before September 01, 2008 are eligible for a price difference refund under the Post-Order Price Guarantee policy. We are very sorry regarding this issue."
Posted Thursday 27th November 2008 10:07 GMT
Mark Aggleton
@Phil #
However, I pre-ordered a DVD from Amazon which was released on Monday. As the supermarkets were selling it at a significantly lower price than Amazon they have given me a fiver refund.
Posted Thursday 27th November 2008 12:31 GMT
Rob Haswell
Me too #
I've already post-dated a few invoices.
This topic is closed for new posts.