VAT. Reduction. Today

[Geo]

I understand your take on it fully, BUT and yes its a big one
Look at it this way Karl
The man said it was to boost trade, by enticing more people to eat out, and the reduction would benefit millions of house holds.
ergo, to achieve any single one of these carrots
He was clearly anticipating price cuts via the saving being past on to the consumer
If im wrong and you are right he simply would have said it was to help the industry to regain its losses.
Or is my English flawed?

 

[Gromett]

57p to be precise; £12 x (5%/105%) = 57p

You are of course correct yet again

 

[Gromett]

I understand your take on it fully, BUT and yes its a big one
Look at it this way Karl
The man said it was to boost trade, by enticing more people to eat out, and the reduction would benefit millions of house holds.
ergo, to achieve any single one of these carrots
He was clearly anticipating price cuts via the saving being past on to the consumer
If im wrong and you are right he simply would have said it was to help the industry to regain its losses.
Or is my English flawed?

The enticing people to eat out was related to the 50% discount up to £10 thing.

The 15% cut in VAT was to help the industry recover. He didn't specify that businesses had to lower their prices to encourage customers, nor did he say it was to put money in the pocket of business owners.
How it is handled is purely up to the business owner, the same as last time there was a temporary VAT reduction.

His exact words were this;

So today, I’m announcing two new measures to get these sectors moving and protect jobs.


First, at the moment, VAT on hospitality and tourism is charged at 20%.


So I’ve decided, for the next six months, to cut VAT on food, accommodation and attractions.


Eat-in or hot takeaway food from restaurants, cafes and pubs;


Accommodation in hotels, B&Bs, campsites and caravan sites;


Attractions like cinemas, theme parks and zoos;


All these and more will see VAT reduced from next Wednesday until January 12th, from 20% to 5%.


This is a £4 billion catalyst for the hospitality and tourism sectors, benefiting over 150,000 businesses, and consumers everywhere - all helping to protect 2.4 million jobs.

On the Eat out and help scheme here are his exact words.

So, to get customers back into restaurants, cafes and pubs, and protect the 1.8 million people who work in them…


…I can announce today that, for the month of August, we will give everyone in the country an Eat Out to Help Out discount.


Meals eaten at any participating business, Monday to Wednesday, will be 50% off, up to a maximum discount of £10 per head for everyone, including children.


Businesses will need to register, and can do so through a simple website, open next Monday.


Each week in August, businesses can then claim the money back, with the funds in their bank account within 5 working days.


1.8 million people work in this industry. They need our support and with this measure we can all eat out to help out.

The eat out and help scheme puts money in the hands of consumers by making food cheaper. The VAT scheme can be read either way. I as a businessman thought when I heard it that it was aimed at helping my company and my staff... I read it as protecting jobs.

 

[Gromett]

PS: at no point in his speech did he mention helping millions of households... His mention of households was related to the insulation funding etc.

 

[Gromett]

Damnit, forgot to link the transcript of the speech which I watched live.

A Plan for Jobs speech

A Plan for Jobs 2020 speech as delivered by Chancellor Rishi Sunak.

www.gov.uk

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[Gromett]

57p to be precise; £12 x (5%/105%) = 57p

Just wanted to say my accountant many many years ago taught me this little trick which has proven useful over the years. This is not aimed at teaching you as I am sure you know this basic bit of maths. But other may find it interesting.
For getting the exclusive price from the inclusive price...
either
£12/1.05 = £11.43
Or
£12/1.20 = £10.00

It can work the other way round. If someone tells you the exclusive price, no need to mess with the % sign on your calculator.
£10 x 1.20 = £12.00
£10 x 1.05 = £10.50
£11.43 * 1.05 = £12.00

 

[chaser]

No, It is only illegal to charge it at 20%...

Currently If I charge £12.00 for you to stay at my campsite, £2.00 of that goes into the VAT kitty.
With the reduction I can continue to charge £12.00 for you to stay at my campsite, but only £0.50 of it will go into the VAT kitty.

You as a consumer are not affected in any way. Me as the campsite owner will recover a little bit from being FORCED to shut down for 4 months and now have additional costs associated with covid measures.

If you don't like me charging £12.00 a night now and some of that money coming to my hard working staff, you can always wait until next season and still pay £12.00 with all of the £2.00 going to the government. Your call

The only people who care about the VAT exclusive prices are VAT registered companies. Normal consumers should be quoted an all in price at all times.

Maybe they were forced to close but they got a 10 grand grant plus their staff payed for them, plus maybe rates holiday, they won't have done too bad, same as pubs who have been drawing but could stop in bed.

 

[Gromett]

Maybe they were forced to close but they got a 10 grand grant plus their staff payed for them, plus maybe rates holiday, they won't have done too bad, same as pubs who have been drawing but could stop in bed.

Still having to pay rent, insurance and many other expenses. The government did a great job protecting jobs as much as it could. But it didn't cover everything.

 

[DC4JC]

The 15% cut in VAT was to help the industry recover. He didn't specify that businesses had to lower their prices to encourage customers, nor did he say it was to put money in the pocket of business owners.
How it is handled is purely up to the business owner, the same as last time there was a temporary VAT reduction

He (chancellor) may not have said it or clarified it, but Ive seen a couple of MPs that have been asked directly whether this is for the benefit of the business or to be passed onto the customer and they were very clear that it was to reduce prices and to encourage people to 'staycation' and go away in this country and not only support hotels, b&bs, campsites etc, but local businesses.
Just saying.

 

[Gromett]

He (chancellor) may not have said it or clarified it, but Ive seen a couple of MPs that have been asked directly whether this is for the benefit of the business or to be passed onto the customer and they were very clear that it was to reduce prices and to encourage people to 'staycation' and go away in this country and not only support hotels, b&bs, campsites etc, but local businesses.
Just saying.

I listen to the words the chancellor says, not how his MP's want to interpret it.

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[Potty]

Can confirm that CMHC are passing on the VAT reduction. Arriving at a site on Saturday for a 5 night stay, we were charged for 4 nights at the old rate and have to return to the office on Wednesday to pay for one night at the new rate.

 

[Gellyneck]

Can confirm that CMHC are passing on the VAT reduction. Arriving at a site on Saturday for a 5 night stay, we were charged for 4 nights at the old rate and have to return to the office on Wednesday to pay for one night at the new rate.

Confirm on checking in today VAT charged at 5% on C&MC site.

 

[DC4JC]

CCC have also stated on their website that they will be passing on the reduction in VAT.