Nov 26 2008
British VAT Change Affecting Online Retailers
I don’t know if you will have all heard (given that most of my readers are hailing from the USA) but the UK government has reduced VAT — the tax we pay on many goods and services — from 17.5% to 15% effective as of Monday 1st December.
While this is barely going to scrape the service of outgoing costs for the average billpayer (things like food are mostly zero-taxed anyway), it’s causing huge problems for many online retailers. Pre-packaged e-commerce solutions often have the VAT rate “hard-wired” in to them, which means that come Monday morning the developers of the software and those retained by the companies to maintain the websites are all going to have a bit of a headache.
On top of the mess being left in the hands of developers and business owners, there’s already cowboys jumping on the opportunity to market themselves as experts at tweaking VAT rates. Now how do you put that on your business card? “E-commerce website VAT tweaker”?
Anyway… my bespoke e-commerce solutions? Unaffected, of course. ;)
Warning
This post is over 6 months old. This means that, despite my best intentions, it may no longer be accurate. Age, motherhood, experience, loss... these things have all changed me from when this blog was started back in the heady (ha) days of my youth.
As much as I would like to go back and edit 10 years of archives to provide an insight into the 'me' of now — to update coding snippets and revise website advice — it would probably take years to do so (by which point I'd have to start again!) This would defeat the point of keeping these archives anyway.
Please take these posts for what they are: a brief look into my past, my history, my journey.
15 Responses so far
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Not just ecommerce site either. We do LOADS of hotel websites, and we have a hotel directory with work. They need their prices changing in line with the new VAT rate too.
Also, unaffected by this is Actinic as well, which is what we build our ecommerce sites on ;)
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Forget online retailers, this change in VAT is messing with my BRAIN.
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Is 15% more then 6 cents on the dollar?
>.>
That’s cool that they actually lowered the taxes. I doubt that would ever happen here. -
oh god, Rhys mentioned the A word. argggghh
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I agree that this isn’t really going to help. To put it into perspective:
If something Costs £100 right Now;
On Monday December 1st it will cost £97.50 …
In my honest opinion that isn’t even going to START to help bring the economy back to its original status. VAT should be lowered a lot more; maybe to 10%
Or would that screw up the economy even more? Okay, I will shut up I don’t know what I am talking about >.> -
Hey, hey, hey, what about bringing it back up to 18%? Or was that proposal really just a “Hm…” thing? :P
I like it though; 1.15 is better for mental maths. :P
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@Joe: TBH I don’t think lowering it to 10% would do a fat lot either. I think more pressure should be put on energy companies to bring their prices back down to reflect the decreasing cost of a barrel of oil.. I know that’d help many, many people.
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@Anthony: It’s about $0.23 for 15%.
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Canadian taxes used to be 15%, but they were lowered to 13% a while ago. I don’t even notice the difference because I don’t buy high-cost things.
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I’m not sure if my boss has caught on to this, or if it’ll effect us at all really? I might alert them tomorrow, I am sure something somewhere in all our programs will sort out VAT… hmmmm
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The change will probably cost more that it saves. Stupid government we have.
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Well, I doubt it will really make much difference to me and to be honest I can’t see how this will help with the credit crunch problems. This remains to be seen.
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@Joe: TBH I don’t think lowering it to 10% would do a fat lot either. I think more pressure should be put on energy companies to bring their prices back down to reflect the decreasing cost of a barrel of oil.. I know that’d help many, many people.
Correct me if I’m wrong, but isn’t the lowest VAT allowed to be under EU rules 15%? At least that’s what I heard on The Wright Stuff.
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Wow, I’m kind of glad for my roughly 9% sales tax.
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I’m gonna be rich from all the money I’m saving! *dances*
