good news?

ei.sdraob

for retailers here?

http://www.timesonline.co.uk/tol/news/politics/article7025833.ece

A rise in VAT is looming whichever party wins the general election, as Labour and the Conservatives draw up plans to balance Britain’s books.

Alistair Darling and George Osborne, the Shadow Chancellor, are both considering raising VAT to as high as 20 per cent — the European average — from the current rate of 17.5 per cent, The Times has learnt.

this would make Northern Ireland not as attractive of a shopping destination?

Eliot Rosewater

I dont think a 2.5% rise in VAT will do anything.

Consider a good that is being sold pre-tax for £100. The current price is £117.50. After the VAT raise it would be £120. Thats a 2.1% rise in price from £117.50. Not that significant to be honest.

Now factor in that retailers such as clothes shops usually round their prices up or down to the next €5. So I would imagine such a move will only impact in a big way upon large products such as cars.

(This is all assuming that my sums and methods are right).


The only noticeable effect I ever see with changes in VAT rates is with my hosting company, who price their products pre-tax and then add on the tax rate afterwards. Even at that, I had to pay an enormous 6c extra for a domain after the VAT increase in the budget before last.

ei.sdraob

according to retailers here our previous vat increase "hurt" them
so the same happening to a competitor should be seen as a gain?

tho you are right it is rather small, the currency fluctuation and difference between euro and pound is a bigger variable i suppose

silverharp

also dont forget EUR/GBP has gone from .93 in Oct to .87 recently. There is still the problem of higher salaries and rates I assume are higher here