hotel changing contract due to vat rate

clancyoo7

Hi all just looking for some advice before I dive into an argument. First of all my fiance and i went to a book our reception in Aug 2010. They had a package on offer which was normally €60 but was now €55 and we came to an agreement we paid €54. I paid the deposit and we had our contract. There has since been a change to the vat laws and come the 1st June 2011 the rate was reduced or so i thought. After a meeting this evening i brought up the issue of the vat rate reduction and i was told that because i received a reduction at the begining that if i insisted that they would then charge me the original price €60 and apply the discount to that rate. I was fuming when i heard this. The mrs was with me and did not want me insisting on it creating some bad blood. The manager has been good but i feel the price agreed was subject to a rate of 13% now wants to change the contract if i pursue it. The money is not coming out of their pockets and does not affect their ability to perform the contract. Am i being unreasonable here ?

Vego

soo even tho your getting the rate at a reduced rate from the normal rate you feel hard done by when you want more of a reduction and they said they will do it based on the standard rate ?

clancyoo7

Vego wrote: »

soo even tho your getting the rate at a reduced rate from the normal rate you feel hard done by when you want more of a reduction and they said they will do it based on the standard rate ?

The rate was subject to vat at the time of 13% but now has been reduced. The reduction is suppose to be passed on. It will not affect the money they receive and are overcharging based on the terms of original contract. The price agreed should not come into it. The vat rate in force the time the contract will be supplied is the issue.

Keith186

Yes you're being unreasonable!

They were good enough to give you a 10% discount in the first place and you're making an issue over about €2.50.

Small money to worry about in this scenario and probably hassle for them to amend it on their booking system so can't blame them for their stance tbh.

If this is for you're own wedding reception you wouldn't want to act so petty with them.

clancyoo7

Keith186 wrote: »

Yes you're being unreasonable!

They were good enough to give you a 10% discount in the first place and you're making an issue over about €2.50.

Small money to worry about in this scenario and probably hassle for them to amend it on their booking system so can't blame them for their stance tbh.

If this is for you're own wedding reception you wouldn't want to act so petty with them.

Fair enough they gave me a discount of 10% but now its only 5%. If the rate went up by 5% would they be so gracious and absorb the cost?

There will be over 250 people
2.5 * 250 = 625
€625 Is better in my pocket.

Keith186

clancyoo7 wrote: »

Fair enough they gave me a discount of 10% but now its only 5%. If the rate went up by 5% would they be so gracious and absorb the cost?

There will be over 250 people
2.5 * 250 = 625
€625 Is better in my pocket.

Well that changes things when its for all the guests I'm half asleep and didn't realise it'd be for 250 people!

You have good reason to follow this up but I'm not sure what the situation is with pre agreed discounts in contract law.

Maybe suggest to meet them half way if you would be happy with that. As I said above I don't think you would want to pïss them off so that they may give a poorer service on the big day.

Best of luck with it.

clancyoo7

Keith186 wrote: »

clancyoo7 wrote: »

Fair enough they gave me a discount of 10% but now its only 5%. If the rate went up by 5% would they be so gracious and absorb the cost?

There will be over 250 people
2.5 * 250 = 625
€625 Is better in my pocket.

Well that changes things when its for all the guests I'm half asleep and didn't realise it'd be for 250 people!

You have good reason to follow this up but I'm not sure what the situation is with pre agreed discounts in contract law.

Maybe suggest to meet them half way if you would be happy with that. As I said above I don't think you would want to pïss them off so that they may give a poorer service on the big day.

Best of luck with it.

Thanks Keith i find it difficult going to them cap in hand asking apologetically for what you are suppose to get. I don't want to argue with them and you can't help but feel you may win the battle but ultimately lose the war when things go pear shaped on the big day.

Tayla

There were a few threads on this before in the weddings forums, maybe they might help you out

http://www.boards.ie/vbulletin/showthread.php?p=72150606

maxer68

Read their terms carefully. If it says the rate can change due to tax changes, you have a case. Also if the quote or anywhere on documentation says including vat at 13.5% you have a case.

If none of the above apply, then its up to the hotel what they do.

BTW - the difference is €2.20 per head. - vat is calculated on the net price.

Staplor

But how much of the 54 is for wine etc, it's not the full amount that should be discounted. I was in a similar situation, told them the IHF had said the rate was to be passed on and if it wasn't we wouldn't be happy. They passed the reduction on, less the drink amount which I was happy with. Otherwise I would have made a reduction on settling the bill.

davo10

They gave you a 10% reduction, you agreed price and paid the deposit, the contract was then signed. So they are sticking to their agreement but you want it changed. If you demand the reduction and threaten to take your wedding elsewhere then you are breaking the contract, they keep your deposit and you may not get the venue nor somewhere else which will give you a 10% reduction. If they contacted you and said demand has increased and we are putting our prices up 5% above the agreed contract price, what would you say?.

Crikey, a 10% reduction on a wedding for 250 is €1500 and you want to argue over €550, I'd tell you that you if you want to renegotiate, you could have the full price less the vat reduction.

davo10

Staplor wrote: »

But how much of the 54 is for wine etc, it's not the full amount that should be discounted. I was in a similar situation, told them the IHF had said the rate was to be passed on and if it wasn't we wouldn't be happy. They passed the reduction on, less the drink amount which I was happy with. Otherwise I would have made a reduction on settling the bill.

Staplor, did your hotel give you a 10% discount to start off with?

clancyoo7

davo10 wrote: »

They gave you a 10% reduction, you agreed price and paid the deposit, the contract was then signed. So they are sticking to their agreement but you want it changed. If you demand the reduction and threaten to take your wedding elsewhere then you are breaking the contract, they keep your deposit and you may not get the venue nor somewhere else which will give you a 10% reduction. If they contacted you and said demand has increased and we are putting our prices up 5% above the agreed contract price, what would you say?.

Crikey, a 10% reduction on a wedding for 250 is €1500 and you want to argue over €550, I'd tell you that you if you want to renegotiate, you could have the full price less the vat reduction.

I am not in breach of contract the price agreed at the time was subject to vat at 13% by seeking this new rate. How do you come to this conclusion The rate has been reduced and now the amount owed is 9%. This information should be obvious from the post.

The vat rate to be charged the time the contract is supplied is 9%. This is money to be paid to the government and is not in any way going to affect the hotels bottom line. They have factored in what they could afford when they accepted the deal.

When you consider the package has alcohol included I would never expect to get the full 5%. Commonsense has to come into play and a certain amount of goodwill must exist between both parties.

The discount was a special offer they advertised at the time and was not just available to me

littlejp

If the rate had gone the opposite way you can be sure they'd be passing the increase onto you.
On the other hand you don't want any bad blood between you and the hotel. They could essentially make or break your wedding day.
Is that worth €2.20 per person?

clancyoo7

littlejp wrote: »

If the rate had gone the opposite way you can be sure they'd be passing the increase onto you.
On the other hand you don't want any bad blood between you and the hotel. They could essentially make or break your wedding day.
Is that worth €2.20 per person?

Thanks Littlejp. without a doubt i would be paying. But when you consider the amount of money they will receive through drink sales and accommodation booked through our wedding as well as what they will receive from us, you would imagine that they would not make such an issue of this.

slimjimmc

clancyoo7 wrote: »

Thanks Littlejp. without a doubt i would be paying. But when you consider the amount of money they will receive through drink sales and accommodation booked through our wedding as well as what they will receive from us, you would imagine that they would not make such an issue of this.

Surely that was a main factor in you getting your 10% discount too, don't you think? considering the large discount you got why are you making such an issue of this?

Just illustrating that the very reasoning you are using to justify your view can also justify the hotel's view.

Vego

this is the thing I dont get ....your getting a big discount already ...yet you want more ?

littlejp

Vego wrote: »

this is the thing I dont get ....your getting a big discount already ...yet you want more ?

When booking things like venues for weddings all prices are negotiable. That's just the way it always is. You never go with the first price. I'd call it the agreed price rather than a discount. The hotel are still making plenty of money.
The vat rate was reduced and the hotel are the ones to benefit.

Bella mamma

It is your money. I'm amazed at people saying you're effectively being greedy. The price the hotel quotes is never the price given, it's always reduced when you ask.

Let's say someone went to buy a car and was told it was 15k, and then asked "What's your best price?", and was offered the car for 13.5k (an everyday occurence, just like booking weddings). Both parties then signed a contract but the VRT was reduced by 4.5% in the interim. Should the dealer keep the 4.5% (worth thousands and thousands on 150 or so cars, equivalent to 3 weddings a week for a year), or should the buyer receive THEIR money back?? I rest my case.

This might clarify it, skip to the end.........

http://www.weddingsonline.ie/discussion/viewtopic.php?f=13&t=315348&start=270

Staplor

The price I agreed on was X including vat (which had an amount of discount included). We agreed the only thing that would change the price was vat. When the rate came down I stuck by my guns, I did my calculation of the new rate and made my new target price in my head, and we did some more negotiating and I bet my target by a euro.

ch750536

I'm with the OP here. The discount is a red herring and shouldn't even be mentioned.
You have agreed a price of
x * vat = Y

The whole purpose of the VAT change is to pass on the savings to the consumers, not the suppliers.

You are correct to ask for the new price, stand firm.

To those who say 'arguing over only €500', shame on you! I would argue over €5 if it was mine, is as good as theft!

ted1

Soes the price breakdown specify x +13.5 % if so then you have a case. Can't get over all the other posters who think there living in the Celtic tiger era, where you paid the initial price quoted without even haggling, they'll even tell you to add a 20% tip

noodler

There is no legal obligation to pass on the rate reduction.

I am not sure I could ask for a reduction if I booked and paid for a trip to the cinema on May 31st for a visit on June 5th (when the lower VAT rate would have come in).

Bella mamma

noodler wrote: »

There is no legal obligation to pass on the rate reduction.

I am not sure I could ask for a reduction if I booked and paid for a trip to the cinema on May 31st for a visit on June 5th (when the lower VAT rate would have come in).

We had a family wedding at the weekend, which is the only reason I know about this!

My family member was in the same position as the OP. Revenue soon sorted it. Hotels are indeed oblidged to pass on the VAT rate reduction.

maxer68

noodler wrote: »

There is no legal obligation to pass on the rate reduction.

I am not sure I could ask for a reduction if I booked and paid for a trip to the cinema on May 31st for a visit on June 5th (when the lower VAT rate would have come in).

Bella mamma wrote: »

We had a family wedding at the weekend, which is the only reason I know about this!

My family member was in the same position as the OP. Revenue soon sorted it. Hotels are indeed oblidged to pass on the VAT rate reduction.

Nobody is OBLIGED to pass on a rate reduction unless it is written into a contract and that contract predated the vat change.
If anyone thinks they can tell places they "must" or are "obliged", you'll get a sharp shock unless you have the relevant signed terms and conditions stating such.

However if its is written in a contract that the vat rate is 13.5% and that the price is fixed except for changes in tax, then you can claim a reduction.

The other side of the coin is If the vat rate rose to 18%, would the hotel have added in the extra 4.5%.

Bella mamma

maxer68 wrote: »

Nobody is OBLIGED to pass on a rate reduction unless it is written into a contract and that contract predated the vat change.
If anyone thinks they can tell places they "must" or are "obliged", you'll get a sharp shock unless you have the relevant signed terms and conditions stating such.

However if its is written in a contract that the vat rate is 13.5% and that the price is fixed except for changes in tax, then you can claim a reduction.

The other side of the coin is If the vat rate rose to 18%, would the hotel have added in the extra 4.5%.

I was clearly referring to your first line above. The OP's contract was signed before July 1st, at the old VAT rate, as was my family member's contract, who I said was in the same position as the OP.

Re your last line - completely irrelevant

discus

Vego wrote: »

this is the thing I dont get ....your getting a big discount already ...yet you want more ?

Stop making the OP out to be some money sucking parasite.

This is a VAT issue. The hotel are charging him for an event which is happening AFTER the VAT decrease. If the hotel refund him in order to reflect the new VAT conditions, they will still me making the same amount of profit. What they are doing is using the VAT decrease as a way to improve their profits, and not passing it on to the consumer... Ireland eh?

OP, I'd look around at other hotels, and try find a better deal. If you do find it, then get on to the hotel and tell them you are 1 considering taking your business elsewhere, with someone who'll pass on the VAT savings. That manager sounds like a right sh*t for threatening to increase the total price. Would you care to name and shame?

mikemac

The OP is getting a right hard time
And some like Keith in Post four acknowledged they didn't even read it correctly

The reason you got a big discount is your numbers, 250.
The hotel will making money from accommodation and drink from all of these.
It's possible they will sell out the hotel that night. So why are there posts that arguing will make or break your wedding??

You did the deal and the contract was signed

You are not asking for a further discount, just to have the contract adjusted to reflect the new VAT rate.
As said already, this doesn't include certain items like wine.

In fact it's not even the hotels money, it was VAT to be handed up to Revenue. So better in your pocket OP then theirs. Keep your correspondence to letters and keep copies to yourself.
It shouldn't be an issue. If you're struggling to get it sorted write a letter to Irish Hotel Federation and cc the hotel.
Don't expect strong action but they should push along the hotel maybe

discus

mikemac wrote: »

In fact it's not even the hotels money, it was VAT to be handed up to Revenue. So better in your pocked OP then theirs. Keep your correspondence to letters and keep copies to yourself.
It shouldn't be an issue. If you're struggling to get it sorted write a letter to Irish Hotel Federation and cc the hotel.
Don't expect strong action but they should push along the hotel maybe

That was how I was trying to put it... Damn early mornings. IHF is a good idea too. If they don't get back to you... talk to Joe

Fey!

250 x €60 = €15,000. Before Vat @13% = €53.10.
250 x €54 = €13,500. Before Vat @13% = €47.79.

However, the VAT change only applies to food, so there has to be a breakdown of the costs to calculate properly. For example:

Food: €30. Before VAT @13% = €26.55. Including VAT @9% = €28.94.
Drink: €18. Before VAT @13% = €15.92
Service: €6. Before VAT @13% = €5.31

Therefore with VAT @9% for food, it should now be €52.94 instead of €54, making the new total for 250 people €13,235, a saving of €265.

These figures are purely for example, not "FACT"!!! But they should indicate what should happen. It's also a very basic example; there are probably other calculations I haven't put in.

This saving should make no difference to the wedding venue as it is a difference in the tax, not the profit margin.

Like that, the OPs original discount does not come into it.

Unfortunately I have found that most of the bars and restauraunts who advertised themselves giving the VAT discounts when the reduction happened have raised their prices to pre-reduction levels. In a lot of cases this was done by not changing their prices but instead giving the discount at the till, but they just stopped giving the discount at the till. Because the menu prices never changed, customers didn't notice the sudden hike, and all of the posters advertising their "tax reduction" just disappeared. That is how it appears to have been done in a number of restaurants around where I work.

tl;dr The OP should fight his corner here, if not for the money, then for the principle. He should also forward any documentation and correspondance to consumer affairs, and let them take on the business and get it named and shamed.

clancyoo7

Thanks for all the replies, I was getting worried when i started the thread I was beginning to think I was way out of line to be even thinking it, judging by some of the replies.

I wont name and shame the hotel yet until after round 2 on wed. I have looked at the contract and there is no mention of vat. There is one clause in the contract that states that the hotel reserves the right to amend or alter any regulation. You cannot have a clause in a contract which can fundamentally change the original terms of the contract. If such a clause would be allowed to exist you could effectively double or treble the price of everything agreed without the consent of the other party. No contract would be worth the paper it was printed on.

I am of the opinion that where there is no vat rate mentioned. It must be presumed that the vat rate applicable is the one in force at the time the contract was signed. Its not as if there are a multiple rates to which the wedding food and accommodation is subject to. While there is no obligation to pass on the vat rate to deals offered after the 1st July 2011. This deal was agreed subject to the rate at 13.5%. I don't believe that the argument that they are not obliged to pass on the reduced vat rate holds any water.

I have also noticed that they offered a room rate for guests as part of the contract has also not been amended to reflect the new vat rate. I would not even have looked into this if they were some way reasonable. I will be inquiring into both now.