tag:blogger.com,1999:blog-3322543472485475876.post4439498525906609531..comments2024-01-12T00:20:22.174-12:00Comments on Machin Mania: VAT ReductionMachin Manhttp://www.blogger.com/profile/09518381259926478157noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-3322543472485475876.post-12157348091137093152008-12-03T20:03:00.000-12:002008-12-03T20:03:00.000-12:00Financial guru Martin Lewis states in his weekly e...Financial guru Martin Lewis states in his weekly e-newsletter:<BR/><BR/>"VAT cut - Get £££ back on purchases big and small. On Monday the VAT rate changed from 17.5% to 15%. Here’s a quick Q&A (thanks to JW at PriceWaterhouseCoopers for help). <BR/><BR/>Do shops have to cut prices? No. If they keep them at old levels, it’s a price rise, as effectively they’re increasing the pre-VAT price. Yet with the cost of price list changes & the poor retail climate it's likely. After all, dropping a £9.99 DVD to £9.78 looks weird. Many passing the cut on are more likely to leave some goods, and cut others by more than the difference. <BR/><BR/>It’s a 2.1% not 2.5% price cut. Imagine an item at £100 before VAT. Add the tax and it now costs £115, where it used to cost £117.50. This means you save £2.50 per £117.50 (not per £100) a cut of 2.13%. <BR/><BR/>Hope this is of interest to anyone hoping to save some money.<BR/><BR/>GLENN MORGANAnonymousnoreply@blogger.com