| Author |
 Topic  |
|
|
devshb
Senior Member
United Kingdom
1904 Posts |
 Posted - November 24 2008 : 12:47:45
|
ok, so in the uk as from next monday (1st-Dec-2008), uk vat changes from 17.5% to 15%, so I thought I'd add a new topic as a talking-point on how people are expecting to deal with it from a vpasp perspective.
So, I'm not really asking a question, more starting a discussion.
From what I can see, all you'd need to do is change the tax config option from .175 to .15 - historic orders should still be reporting/viewing correctly even after the change because the tax is stored/displayed on/from the order data rather than calculated at view-time, whereas products displays calculate tax in current rates.
So, I don't think any changes will be needed other than changing your tax config option on monday, and then changing it back again in 13 months' time when the rate reverts to 17.5% again.
If you've got our tax addon (byz091), you also won't need to change any code/files because it too uses the "xtaxeurate" config option and will work correctly/fine when you change the rates.
I'm curious what people intend to do with their prices though (ie uk retailers), because in some instances it might mean having to reissue price lists all over again just a few weeks before christmas, so I'm curious if people are intending to increase their base-prices to swallow the difference or if they're intending to keep them the same. We're intending to keep our base prices the same, thereby passing the full 2.5% reduction/discount on to customers, but then again we sell "virtual" products and have no hard-copy pricelists, so it's different for us compared to normal retailers.
For those not from the uk, this is our government's economic stimulation package (no, don't laugh, I'm not joking, it really is).
Simon Barnaby
Developer
[email protected]
www.BigYellowZone.com
Web Design, Online Marketing and VPASP addons |
Edited by - devshb on November 24 2008 12:52:59 |
|
|
Neilt
Starting Member
44 Posts |
Posted - November 26 2008 : 06:07:34
|
Thanks Simon.
I believe the other change is if you have xshippingbycountry set to yes. In which case you may need to edit the entries in the Countries table where there is a value in countrytaxrate.
From Occasional Tasks > Internetional > View/Edit Countries I searched for 'countryhide equals 0' which pulled up all my 'active' countries.
Aside from that it's just the config values in
Xtaxcountryrates
xtaxeurate
plus any language entries/other site text that refers to 17.5%
As for prices, we're waiting to see what our clients want to do but obviously it can be a major job for some of them who have many thousands of products!
It'll be interesting to see if the shops are quiet this weekend as everyone waits until next week to save 2.5%! 
|
 |
|
|
devshb
Senior Member
United Kingdom
1904 Posts |
Posted - November 26 2008 : 07:10:18
|
ah, yes, good call; forgot about those.
My guess is that most retailers who have mostly vat-paying customers (ie not business-to-business retailers or people who have mostly non-uk customers) will increase their base prices to pocket the difference, especially as it's also just been discovered that the vat rate was considered to be going back up above the original 17.5% after the 13 months is up (ie they were thinking of putting it up to 18.5% after the 13 months). ie there's so much uncertainty in the uk tax rates generally as the uk government are just making things up as they go along without really thinking about it, that I can't see any business-to-customer uk retailers not pocketing the difference as a small cushion for the subsequent tax rises and/or loss of customers later on.
Personally, even if it does get passed on, I can't see people rushing out to buy a £1275 tv just because it's now £1245.
I guess the good news (hard to find any, but there's always a flip side) is that the pound is now so low that foreign customers (who are uneffected by the vat rate change) of uk companies now get a really cheap deal (ie the pound's gone from around $2 to $1.5 in the space of just a few weeks; that's a massive saving for foreign, non-uk customers but which also doesn't adversely effect the margins of uk retailers)
Simon Barnaby
Developer
[email protected]
www.BigYellowZone.com
Web Design, Online Marketing and VPASP addons |
|
|
|
devshb
Senior Member
United Kingdom
1904 Posts |
Posted - November 26 2008 : 07:20:19
|
Another thing; if the prices are held as vatinclusive for the site (ie cprice holds the baseprice+vatcost), then if you did want to pass the vat reduction onto the customers you would *not* reduce your prices by 2.5%, likewise when it reverts again to another rate you wouldn't raise it by the rate increase pct either. Mathematically it's slightly different.
I haven't done the maths yet, but I just wanted to add a warning note to retailers who are thinking "we'll reduce our prices by 2.5% and pass it all on" would actually lose money. You'd need to get your piece of paper out and do some algebra to work it out for rises and reversions because it's not quite as simple as it looks.
Simon Barnaby
Developer
[email protected]
www.BigYellowZone.com
Web Design, Online Marketing and VPASP addons |
|
|
|
devshb
Senior Member
United Kingdom
1904 Posts |
Posted - November 26 2008 : 07:38:52
|
I've just worked it out; if your cprice holds the vat inclusive figure, then if you wanted to pass on the full vat reduction you'd need to multiply your current cprice by a factor of 0.9787 (1.15/1.175) to end up with a vat inclusive cprice where vat changes from 17.5 to 15% (or put it another way, reduce your prices by 2.13%)
Simon Barnaby
Developer
[email protected]
www.BigYellowZone.com
Web Design, Online Marketing and VPASP addons |
|
|
|
devshb
Senior Member
United Kingdom
1904 Posts |
|
|
carfin
VP-CART Expert
United Kingdom
948 Posts |
Posted - November 26 2008 : 07:59:03
|
Hi,
we're a business to business wholesaler and our orders have slumped yesterday and today. Apart from it being close to the end of the month (orders normally tail off a little), it has to be that our customers who would usually have put an order in this week are definitely holding back until next week to take advantage of the decrease in VAT. It might not seem like a big saving but it really mounts up for the customers who spend £2,000 to £10,000 a month. Our site does not include VAT in our prices (we don't take payment through the web) so I don't have to change anything, but I can see many smaller retailers who are going to go through a nightmare having to change prices, labels etc to reflect the VAT reduction. I think most small to medium businesses will eventually have to pass the cost of this change on to the customer, cancelling out the 2.5% decrease.
Just my thoughts.
Carrol
www.deanston-electrical.co.uk |
|
|
|
bluesky
VP-CART Super User
304 Posts |
Posted - November 30 2008 : 18:31:18
|
1. i cant seem find a tax config option
2. the only relevent items i seem to find seem to read as follows
xtaxcountryrates_shop 0.148936
xtaxeu_shop No
xtaxeucountries_shop UK
xtaxeurate_shop 0.148936
? Any thoughts
|
|
|
|
bluesky
VP-CART Super User
304 Posts |
|
| |
Topic |
|
All Forums
vat changes in uk announced today
New Topic
Printer Friendly
TrustGuard - PCI Security Scanner
