Friday, 24 April 2009

VAT rate change: big enough to be a nuisance, not big enough to make a difference

When Alistair Darling put the VAT rate down to 15% on 1st December, with very little notice, my initial thought was that all it would do was cause a great deal of annoyance.

At the time I was working for More and it meant several all-nighters for the IT team to get the rate into the software and running smoothly.

Wednesday's Budget has confirmed that the rate will go back up again to 17.5% on 1st January 2010.

Am I the only one who thinks this change up and back again was a complete waste of time?

The cut is far too small to make any kind of difference to spending or pricing. But it's plenty big enough to cause a nuisance, like having to re-write price lists, edit a website, edit sales literature, etc.

Yesterday, I was preparing a set of accounts, and in order to work out a creditor correctly, I had to take 1 month at 17.5% + 13 months at 15% plus 10 months at 17.5%... what a faff.

Come on Mr Darling, have a bit of common sense!


  1. Yes Emily you are quite correct, the whole thing was a headline grabber with very little thought into the cost v benefit. The change wasn't big enought to make a difference, it couldnt go down any further as our hands are tied by Europe, all it's done is cause disruption to businesses at a time when business owners can least afford lost time.


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