VAT: Should they display it?

biko

Knowing the VAT is only interesting if you can claim it back, i.e. is a business or a tourist.

Elmo

parsi wrote: »

What's the point ?

Cloth nappies are 0% VAT and cost a fiver (for example),
Pampers are 21% VAT and cost a tennder (for example).

So what do I base my purchase on -

- the rate of VAT - NO - because it makes no difference to me,
- the VAT-inclusive price - probably because that's what I have to pay,
- convenience - yes.

Well you might purchase the cloth nappies if they are cheaper due to the VAT on them. Disposable nappies could cost the same as cloth ones only more expensive due to the carry VAT they carry. This would be transparent to you if you are shopping around.

I amn't suggesting getting rid of the price inclusive of VAT only adding the price on the price take ex VAT.

Elmo

Magnus wrote: »

Knowing the VAT is only interesting if you can claim it back, i.e. is a business or a tourist.

Also if you find that products in NI are cheaper when you go with ROI VAT, depending on the VAT Rate. If ROI VAT went to 10% we would all claim back our NI VAT wouldn't we? Could we?

rubadub

Stekelly wrote: »

Why?What difference does it make if Vat is 0% or 80%? The price is the price.

Magnus wrote: »

Knowing the VAT is only interesting if you can claim it back, i.e. is a business or a tourist.

+1. I know our accounts dept. is interested in VAT. Dunno why so many are against this idea.

Elmo wrote: »

Breaking down every charge would be a bit pointless I understand that everyone has to make a profit on the product. The retailer makes a decision on the price and will consider VAT but in the main they hope to make a profit.

It shows how much they are really selling the item for. Airlines have been doing this for ages just to really show up how cheap they really are.

If a person went into a shop and wanted say bulk foods for work they might look at 2 different foods, same price displayed, around the same amount of food, but one is zero VAT and the other is 21.5%. Now the business person might go for the high VAT one and then claim it back. On the otherhand the person who has to pay the VAT might go for the high VAT one. The reasoning being that they are getting the same nourishment at the same price, BUT they are also contributing money towards the economy.

The retailer could well have overpriced the VAT free item to bring it up to the other foods price range, the average person off the street might be unaware of this. Reduced/no VAT items are often intended to make them more affordable to people, like childrens clothes etc, in many cases I expect retailers simply hope people forget this. e.g. a jeans store might sell kids and adult jeans at the same price.

MysticalSoul wrote: »

I voted no, as if they did, can see it ending up like it is in the States, where the VAT is added on at the till, so the price we see is not the price we pay :rolleyes:

The OP already said it would have both.

jor el wrote: »

I still don't see why this would be a good idea though. I really don't care how much VAT is on the products that I buy, as I don't have a choice but to pay it.

I would care about sly shops making an extra 21.5% off me when the gov really intended me to get that off. It helps consumers to compare the real value of products.

parsi

rubadub wrote: »

I would care about sly shops making an extra 21.5% off me when the gov really intended me to get that off. It helps consumers to compare the real value of products.

So you believe that a shop that is somehow deliberately charging the wrong VAT rate is going to put it up on a label for all to see ?

To the consumer it's the price that they pay that counts.

Elmo

parsi wrote: »

So you believe that a shop that is somehow deliberately charging the wrong VAT rate is going to put it up on a label for all to see ?

To the consumer it's the price that they pay that counts.

What the poster is talking about is when the Margin for Children's Clothes and Shoes are greater than those for Adults because the shop knows there is no VAT on these products hence rather than passing on the savings to the customer they make an extra amount.

I wouldn't be surprised if Retailers take advantage of the VAT free Children's clothes.

Danno

They should at least state:

€12.15 including 21.5% VAT

OR

€12.15 Including €2.15 VAT

antoinolachtnai

I think that the OP makes a very fair point in principle. People generally don't know or understand much about VAT, despite it being a very important tax, and is the closest we have to a Euro-tax, since it is controlled from Europe to a greater degree than any of the others (not saying this is a bad thing).

Would the proposal really be of any practical use to the customer though? Would adding an extra couple of numbers really make anything clearer?

Also, you have to consider the bureaucracy it would introduce. There is no requirement for sellers to break down between purchase price and VAT at any stage of the sales process. VAT is already a bit of a paper-generator. It would be a lot of extra work, especially for small retailers. And what if they made a mistake?

There are also ambiguities in VAT that mean that calculating and stating the vat paid is not as simple as a calculation on an individual transaction. For example, the nominal VAT rate on the till receipt for a cake in Starbucks is 13.5 percent, but the actual VAT paid by the company is probably more (where the cake is not eaten in conjunction with a meal, a higher rate applies).

Similarly, there are 'compound' product issues. The VAT on a Quarter Pounder with Cheese meal in McDonalds stands at 15.05 percent, according to the till receipt. This comprimise on the rate was come to through a detailed negotiation process (or so I am given to understand). But how do you explain an arrangement like this on a till receipt?

MunsterCycling

Its like the divorce referendum, No MY marriage is perfect therefore no one should have the right to divorce... :rolleyes:

So many short-sighted naysayers that don't want the blinkers to come off, please stop the nonsense and accept that information is key to decision making and that by requiring shops over a certain turnover to display this information you enable the consumer to make an informed choice.

MC

Cabaal

MunsterCycling wrote: »

Its like the divorce referendum, No MY marriage is perfect therefore no one should have the right to divorce... :rolleyes:

So many short-sighted naysayers that don't want the blinkers to come off, please stop the nonsense and accept that information is key to decision making and that by requiring shops over a certain turnover to display this information you enable the consumer to make an informed choice.

MC

Hang on, the information is available its just lazy people not willing to look for it.

You can't in anyway compare this to divorce unless of course the info is being hidden from people and its illegal to obtain it (ala illegal to get divorced previously)

Come up with a better comparison

parsi

MunsterCycling wrote: »

you enable the consumer to make an informed choice.

MC

How ?

Knowing the VAT rate doesn't affect the price you pay.

jor el

rubadub wrote: »

I would care about sly shops making an extra 21.5% off me when the gov really intended me to get that off. It helps consumers to compare the real value of products.

Shops charging the wrong VAT rate on items is a far more serious issue than just making the customer aware of the different rates. An audit would show up dodgy dealings like this, even their own accountant should be able to keep this in check. I wouldn't imagine that this kind of fraud is widespread either.

MunsterCycling wrote: »

So many short-sighted naysayers that don't want the blinkers to come off, please stop the nonsense and accept that information is key to decision making and that by requiring shops over a certain turnover to display this information you enable the consumer to make an informed choice.

There are no blinkers on me. I know I pay VAT on most products and services. I also know that I have no choice but to pay it on the items that have VAT, so how does it help me to make an informed choice?

As someone else said, it's not as though you'll choose to replace your chocolate bars, which have 21.5% VAT, with tea which, has 0% VAT.

Is it better value for money, just because it has no VAT? No, it isn't. You could replace the expensive biscuits you buy in Tesco, with the cheaper ones in Lidl, that would be better value for money.

I do get what people are saying, about it being nice to see the VAT charged on goods, but I don't see it as something that's really necessary, and it doesn't help to make any kind of informed choice about what you're buying, and alternatives, IMO.

Thoie

I'd say "no" to stop people whining about the fact that the sticker says a tenner, but I'm being charged 12 odd at the till. If we introduce that rule, we'll also need to bring in a rule saying that the total price payable is in much much bigger font than any other numbers on the stickers. This then starts becoming a pain in the neck for retailers as they'll have to go adjust their various printing machine/pricing guns.

thebman

I think it would increase awareness of the different rates of vat and what the items they are applied to.

To see it on a receipt allows someone to directly see how it impacts on their life and day to day purchases instead of making them work it out (which few do).

The real benefit is that in an election if a party says it will lower or raise a particular rate of vat, people will know immediately where it will effect them.

So I say yes as it will allow people to more transparently see the vat rates. I think it should be on receipts and not on the shelves. It should be the percentage and not the actual amount paid.

Elmo

Thoie wrote: »

I'd say "no" to stop people whining about the fact that the sticker says a tenner, but I'm being charged 12 odd at the till. If we introduce that rule, we'll also need to bring in a rule saying that the total price payable is in much much bigger font than any other numbers on the stickers. This then starts becoming a pain in the neck for retailers as they'll have to go adjust their various printing machine/pricing guns.

I as I said in my OP and in my other posts: - I am not asking them to remove the full price from the price tag just to have the price without VAT/or the VAT Rate on the price tag. I do not want it to be like in the US where the Tax is added at the till.

Danno

And I would go one further aswell...

Certain "luxuries" like a litre of petrol/diesel should display: Price, VAT and Excise Duty...

...actually, the wrong order there... Price, Excise Duty and VAT. Show the public where a Tax is Taxed.

antoinolachtnai

What about situations where the retailer is forbidden from showing the VAT separately?

Elmo

antoinolachtnai wrote: »

What about situations where the retailer is forbidden from showing the VAT separately?

When does this happy? and why?

antoinolachtnai

The margin scheme

http://www.revenue.ie/en/tax/vat/leaflets/margin-scheme-second-hand-goods.html

A subtle kink in the VAT continuum.

Also, gambling activity. It is not and would not be practical to state the VAT, which is calculated on the net take, not the turnover. So it is impossible to calculate the actual exact VAT on an individual transaction.

Also, where a non-registered person is selling goods they purchased from a registered person. So if I buy a can of coke for 61 cents, of which 11c is VAT, and I sell it to you for a euro (from a stall on the fringes of a public event, maybe over my garden wall) the VAT would be 11c on the one euro transaction. If I disclosed this to you, you would effectively know my gross margin which might not be good for me commercially. It would also be difficult for me to constantly recalculate the VAT because it would depend on which supplier and at what price I had sourced each individual good.

There is lots to know about VAT for serious students of the subject. There are plenty of other gotchas where things aren't obvious. (I gave the starbucks example and the McDonalds example, but there are plenty of other debatable areas.)

I cannot understand the idea that displaying VAT would be of any immediate benefit to the customer at the point of sale. Maybe it would be better to spend the money this would cost on a sustained public education scheme explaining the virtues and otherwise of VAT?

There are serious issues in the European VAT system which need addressing, mainly around record-keeping and fraud. Customer awareness of rates is not generally perceived to be one of the bigger problems.

Elmo

antoinolachtnai wrote: »

The margin scheme

http://www.revenue.ie/en/tax/vat/leaflets/margin-scheme-second-hand-goods.html

A subtle kink in the VAT continuum.

Also, gambling activity. It is not and would not be practical to state the VAT, which is calculated on the net take, not the turnover. So it is impossible to calculate the actual exact VAT on an individual transaction.

Also, where a non-registered person is selling goods they purchased from a registered person. So if I buy a can of coke for 61 cents, of which 11c is VAT, and I sell it to you for a euro (from a stall on the fringes of a public event, maybe over my garden wall) the VAT would be 11c on the one euro transaction. If I disclosed this to you, you would effectively know my gross margin which might not be good for me commercially. It would also be difficult for me to constantly recalculate the VAT because it would depend on which supplier and at what price I had sourced each individual good.

There is lots to know about VAT for serious students of the subject. There are plenty of other gotchas where things aren't obvious. (I gave the starbucks example and the McDonalds example, but there are plenty of other debatable areas.)

I cannot understand the idea that displaying VAT would be of any immediate benefit to the customer at the point of sale. Maybe it would be better to spend the money this would cost on a sustained public education scheme explaining the virtues and otherwise of VAT?

Just in the same way as their are exceptions in most laws their can be exceptions in this one.

As for the non-regulated person selling in a garden. If I am your competitor and I bought my product for 61c and charged 90c that means I make 10c less then you on that product. No reason not to show that VAT was charged at the 61c, but this is just being picky on your behalf as I don't think at such an event people really care. However if concerts are part of this loop hole we can guess that the 5euro for a small plastic glass of **** beer is over priced, but then we knew this already. Again this could be exempted as could your other examples.

Education in VAT is expensive why not just tell the retailers to ensure that they educate their customer as part of their social conscience.

I don't see why a restaurant couldn't provide VAT rates, aren't all products in a Restaurant charged at the same rate (I am thinking 21.5%).

antoinolachtnai

That's the thing, people don't care. There is no benefit to consumers, whatsoever. At the point of sale, they are only concerned about the final price.

The only people who might benefit are my (inevitably larger) competitors in the coca-cola distribution industry, who would have the information as an extra tool to drive me out of business (and then set prices).

It is unlkely that a person selling beer at a concert of any magnitude would qualify for the small trader's VAT exemption. How do you know for sure that 5 euros for beer in a beaker is expensive? You don't know what the cost base of the promoter, band and publican is.

No, all items in a restaurant are not charged at the same VAT rate, and the very same item may be charged at different VAT rates depending on the circumstances.

Why should retailers have to shoulder the cost of educating people about public policy? It wasn't their idea to introduce the VAT system, and they already have to administer the system, for free. Many retailers are in serious trouble and a few capital-intensive, bureaucratic schemes like this would push some of them right over the edge. What about all the other people in the VAT chain? Why should they not pay their share?

A simpler approach to this would be as follows.

1. Change the VAT rate on absolutely everything to 17 percent
2. Put up billboards on all major thoroughfares and ads in all newspapers saying 'the prices include VAT at 17 percent'.

That would remove the confusion about VAT which you rightly point out and vastly reduce the amount of paperwork.

Elmo

antoinolachtnai wrote: »

That's the thing, people don't care. There is no benefit to consumers, whatsoever. At the point of sale, they are only concerned about the final price.

The only people who might benefit are my (inevitably larger) competitors in the coca-cola distribution industry, who would have the information as an extra tool to drive me out of business (and then set prices).

It is unlkely that a person selling beer at a concert of any magnitude would qualify for the small trader's VAT exemption. How do you know for sure that 5 euros for beer in a beaker is expensive? You don't know what the cost base of the promoter, band and publican is.

No, all items in a restaurant are not charged at the same VAT rate, and the very same item may be charged at different VAT rates depending on the circumstances.

Why should retailers have to shoulder the cost of educating people about public policy? It wasn't their idea to introduce the VAT system, and they already have to administer the system, for free. Many retailers are in serious trouble and a few capital-intensive, bureaucratic schemes like this would push some of them right over the edge. What about all the other people in the VAT chain? Why should they not pay their share?

A simpler approach to this would be as follows.

1. Change the VAT rate on absolutely everything to 17 percent
2. Put up billboards on all major thoroughfares and ads in all newspapers saying 'the prices include VAT at 17 percent'.

That would remove the confusion about VAT which you rightly point out and vastly reduce the amount of paperwork.

The question wasn't should we increase/decrease certain VAT rates into across the board rate.

Why should I have to pay for the education of people who aren't all that interested, it shouldn't always be up to the government to advertise or market education on a mass scale.

How many billboards?
How many TV ads?
How many Radio ads?
How many online ads?
How many VAT events?
How often? How much?

I am only talking about consumer goods in retail outlets. Retailers are in the business of selling they should know what VAT they charge and claim back. Most receipts to businesses clearly Identify the rate of VAT charged. I don't see why it would be any more expensive for the retails to role this out to ordinary shoppers. You have to identify how much you are charging, why not simply put the rate of VAT on the price tag?

antoinolachtnai

Because:

- the overhead of doing it would be significant, when you take into consideration all the small shops in the country.

- the VAT payable is not necessarily as easy to calculate as long-division. There are a number of bases on which VAT is calculated, where the VAT on the individual retail items and transactions need not be computed (for example the arcade or the small shop). In other cases, the effective rate is some sort of compound (such as McDonald's or Starbucks).

The main reason there is a lack of clarity about VAT rates is because there are so many of them and the rules are quite complex. I am suggesting a way to get rid of this complexity by just having one rate, on everything. This would actually save businesses money.

The paper overhead of B2B transaction is significant. B2B businesses tend to be more homogenous (sell fewer types of product) compared to retailers.

Why should the retailer have to pay for educating people who aren't that interested, as you put it?

RE billboards and ads, you could make sure everyone knew about the new universal rate for a few hundred thousand euros. The cost of implementing what you are suggesting would be in the order of 30m euros (10,000 small businesses requiring new POS systems at 2000 euros each; 10,000 further businesses having to implement software changes at a cost of 1000 euros each; not including training costs and the cost of managing compliance, which would realistically be a few million a year; not including the damage to competitiveness caused by making it more difficult and expensive to open a small, simple business).

Why foist all this bureaucracy on retailers when they are going out of business all around us? What is the benefit?

rubadub

parsi wrote: »

Knowing the VAT rate doesn't affect the price you pay.

The price is the same, but as I mentioned before somebody might not choose to buy the product if they know the VAT, so it could affect some peoples decision to buy or not.

jor el wrote: »

Shops charging the wrong VAT rate on items is a far more serious issue than just making the customer aware of the different rates. An audit would show up dodgy dealings like this, even their own accountant should be able to keep this in check. I wouldn't imagine that this kind of fraud is widespread either.

It is not fraud or "wrong", Elmo already explained my post.

Elmo wrote: »

What the poster is talking about is when the Margin for Children's Clothes and Shoes are greater than those for Adults because the shop knows there is no VAT on these products hence rather than passing on the savings to the customer they make an extra amount.

I wouldn't be surprised if Retailers take advantage of the VAT free Children's clothes.

It might be considered morally wrong, I would call it underhanded at best.

jor el wrote: »

so how does it help me to make an informed choice?

You could see if a retailer is using this or similar tricks.

There is no benefit to consumers, whatsoever. At the point of sale, they are only concerned about the final price

jor el wrote: »

As someone else said, it's not as though you'll choose to replace your chocolate bars, which have 21.5% VAT, with tea which, has 0% VAT.

As I already said if there were 2 foods just as "satisfying", same price but different VAT, then a business person might go for the high VAT one so they can claim it back. The taxpayer might also go for the high VAT one since the money is contributing to the economy, rather than the retailers or manufacturers pocket.

antoinolachtnai wrote: »

Also, you have to consider the bureaucracy it would introduce. There is no requirement for sellers to break down between purchase price and VAT at any stage of the sales process. VAT is already a bit of a paper-generator. It would be a lot of extra work, especially for small retailers.

Thats a good point, it could increase cost of the product overall. Just like some companies now employ staff to remove sterling prices on products.

Elmo

antoinolachtnai wrote: »

Why should the retailer have to pay for educating people who aren't that interested, as you put it?

Actually you point out their uninterest I was just continuing your argument.

RE billboards and ads, you could make sure everyone knew about the new universal rate for a few hundred thousand euros.

Across the country, for how many years? 10 20???

RE billboards and ads, you could make sure everyone knew about the new universal rate for a few hundred thousand euros. The cost of implementing what you are suggesting would be in the order of 30m euros (10,000 small businesses requiring new POS systems at 2000 euros each; 10,000 further businesses having to implement software changes at a cost of 1000 euros each; not including training costs and the cost of managing compliance, which would realistically be a few million a year; not including the damage to competitiveness caused by making it more difficult and expensive to open a small, simple business).

I am just asking them to place a sticker beside the product stating that it have a VAT RATE of either 0%, 4.8%, 13.5%, 21% at the very least, just in the same way as the put the price up or their special offers up.

Also even if I was asking retailers to change their POS systems new entrants would buy new equiment with it all ready installed.

Guy:Incognito

Elmo wrote: »

How many billboards?
How many TV ads?
How many Radio ads?
How many online ads?
How many VAT events?
How often? How much?

None of any of those, just one website.


The information is already out there if people want it.

rubadub wrote: »

The price is the same, but as I mentioned before somebody might not choose to buy the product if they know the VAT, so it could affect some peoples decision to buy or not..

Those people are stupid. I've also yet to meet anyone who buys depending on Vat rate.

If your happy to buy something at the price stated, what difference does the amount of vat applied to it make?

antoinolachtnai

If you boiled it down that simple, it could be done, but there would still be a cost, and it is still hard to see what the benefit would be for consumers.

As I said, the effective rate of VAT is not necessarily one of the rates you mentioned. Listing multiple rates of VAT for the same item would cause greater confusion rather than greater certaintly.

Grudaire

Has nobody been to the states? They don't display any tax on the price, so you pick up something marked 3.99, go to the till and it costs 4.13 - Now thats a pain in the arse.

What benifit is there really?

Elmo

Stekelly wrote: »

None of any of those, just one website.

One website mmmmm

You know there are people who don't use the internet.

I do think it is important that people know the VAT charged.

Has nobody been to the states? They don't display any tax on the price, so you pick up something marked 3.99, go to the till and it costs 4.13 - Now thats a pain in the arse.

Do I have to repeat myself. Can anyone read the question AND the other points.

No change to existing price tag which includeS VAT just an extra amount or % stating how much of the price goes to the government. Nothing on your receipt. Just there purely to inform shoppers in the same way as E numbers, country of produce and other such items are.

Danno

I think alot of people contributing on this thread are loosing the run of themselves. A simple practice, without costing €Millions, would involve setting a date - Say 1st February 2010, whereby all businesses selling to the public would have to display the amount of VAT paid in the transaction, both on the price ticket, the reciept and any advertisements. I would safely say that 90% of reciepts already give a break down, and quite alot of advertisements.

What customers should be entitled to see is...

EXAMPLE 1:
Local shop selling a slice of bread: Price ticket says: PRICE: €1.00, includes €0.00 VAT.

EXAMPLE 2:
Local pub selling pint of Guinness: Price ticket says: PRICE €4.00, includes €0.71 VAT and €1.48 Excise Tax

EXAMPLE 3:
Car Valeting Service: Price ticket says: PRICE €113.50, includes €13.50 VAT.

Any reciepts issued should display the same information.

Simple to implement.