Ask the Experts
Alistair Darling announced in his pre-Budget report that VAT is to drop by 2.5%
from December 1st in a bid to encourage customers to spend more and boost the
economy. All well in theory, but has it made a meaningful difference to retailers?
Jo Cooper asked for your thoughts on the VAT cutbacks
Celebrations, Kirkham, Preston, Lancashire
last month or two business has been amazing for us, me and the staff
“I haven’t yet been able to implement the VAT charges in my
here have been rushed off our feet trying to complete all the orders
shop, and if I’m honest I doubt I will be able to do anything on it
coming through, so it shows people certainly are buying, especially
until after Christmas. I know retailers have been urged to put the
in the run up to Christmas. We’ll have to see what the New Year
changes in place, but at the moment I have a shop full of stock in
brings, but this year has been really good for me and of course, I
the run up to Christmas which I have paid for at 17.5%, I can’t just
hope for the same moving into next.”
change all of that and take the loss. Personally, I don’t think it was
the best thing to do, as it doesn’t really benefi t anyone, not in the
sense of an immediate change or relief. I would have preferred to Jayne Czarnpopski, The Village Card Shop,
see a reduction in something such as income tax instead, which
Streatham, London
would have been much more suitable. Something like that would
“Put it this way, I have implemented the change into the tills, because
give retailers who are struggling that little bit extra through these
I feel its only right that we should, I don’t think I could not pass on
tough times and really help them out. I think also the practicality
the rate to our customers. However realistically, I have to say I think
of changing to adapt all the paperwork, pricing and everything in
it will make very little impact on our customers, it does seem like
the shop is actually costly and timely for us, and we don’t have the
a waste of time. Not one person has asked me about it when they
money or the time to spare right now, we need to push sales instead
have been at the till. In fact, I was talking to a customer just now and
and get people through the door. Its good to see they have tried
we laughed about the two or three pence saving these changes has
something, but I don’t think it is the most effective thing they could
made on her purchase. For all the hype and news about it, the actual
have done to help us, or indeed, done at the best time.”
difference to the customer is minimal and at this time of year, they
For all the hype and news about it, the actual difference to the
customer is minimal and at this time of year, they are going to buy
anyway because it’s Christmas
are going to buy anyway because it’s Christmas, regardless of the
Adrian Hine, Cards & Gifts, Leek, Staffordshire VAT rate.
“I don’t think we will make the reductions in VAT, certainly not just The greetings card industry I think is really facing a tough time
yet. We are an online card and gift retailer, so we don’t actually out of all of them because the actual purchase price of cards is
have a shop front as such. On the one hand this would mean that so low generally. You have to sell a lot, to get little gain and so it
in practical terms, it would be really easy for us to actually change feels like you have to work harder to get the rewards. For example
the prices on each product, which would be a real headache for even gifts and their higher price points means you can sell one for
a traditional shop to do. I could literally change all my prices in more cost. With VAT, the low prices means more than most places
seconds because they are all online. However, I don’t honestly feel that the actual, relative difference it makes is much much less. I can
that it is really worth it at the moment. It doesn’t seem to make that understand the importance of it if you are buying big, but not when
much of a difference, both to our customers and us, so unless that you are trying to shift cards for a matter of pounds.”
changes there seems little point. Even if it went down by as much as For an independent, the time it would take to price all the stock,
5% I am still unsure if we would action it. At the end of the day its all and update all the paperwork is immense, and also comes out of
swings and roundabouts and will be made up elsewhere, no doubt it our own pockets. I think big retailers have to be seen to be doing the
will go up again in the future. right thing, but as independents we really have to weigh up if it is
The bigger chain stores and supermarkets have to be seen to worth our time. Maybe a better alternative would have been to look
make the changes, but I think for smaller companies there is more at something like business rates, or aiding the banks in their rates
choice. At the end of the day we are on a completely different scale, and lending. It seems in times like this you don’t get much help unless
and right now I don’t see anything wrong with holding onto that you are in real trouble, if you keep your nose clean and play fairly it
2.5%, particularly in such a challenging time of year. Certainly in the seems they don’t want to know.”
40 Greetings Today
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