Archive for November, 2008

How we are responding to the reduction in VAT

Sunday, November 30th, 2008

The VAT rate changes tomorrow from 17.5% to 15%. Whilst we welcome any decrease in tax (heaven knows we deserve it), the muppets who think this scheme will revitalise the economy should return to cloud-cuckoo-land. We will do our honest best to pass on the full difference although we bet that many (if not most) small retailers will just pocket the difference. Some will do this as a calculated means of improving margins whilst others will simply not have the manpower, particularly at this time of year, to re-price their stock.

We have introduced an automatic discount on standard rated items of 2.1% to pass on the full effects of the change. This is calculated as follows. An item selling for £100 previously had a price tag including VAT of £117.50. From tomorrow this changes to £115.00. The saving is therefore £2.50. £2.50 as a percentage of the current price of £117.50 is 2.1% and that is what we will pass on. The discount is fully described on the till slip.

The reason we will do it this way is because we are wary of what happens when the VAT rate increases again in a year. If we had decided to undertake the mammoth task (probably 75,000 individual price tickets) of repricing each stock item then any errors (such as items remaining unchanged) would work in our favour. This will be reversed in a years time with possibly serious consequences. We have therefore decided to maintain our current pricing policy and offer a discount to allow for the reduced VAT.

The stupid thing about this election stunt by the government is that the true rate of inflation (by which I do not mean the ho-ho official 4.5%) will overshadow the effects of the VAT decrease in, at best, a couple of months.

Homebrew and winemaking equipment

Wednesday, November 19th, 2008
We have been selling winemaking and home brewing supplies for some time now and trade has been growing steadily rather than spectacularly. We have recently noticed an increase in interest but cannot decide whether this is a result of economic conditions or not. A dedicated brewing shop in Pinner has recently closed down and I am sure this has something to do with it as well. Other customers tell us that there are now few suppliers in Buckinghamshire let alone Chiltern District. We stock the common requirements but if you require anything a bit unusual we can order it for you. Best to email or give us a ring.