Has the vat discount ended ?

[powerstroke]

For the hospitality industry ?? just that the well known tax paying coffee chain Starbucks doesn't
seem to be passing the discount on to us coffee supping plebs , flat white was £3.10 today...

[Deep Thought]

powerstroke said:

For the hospitality industry ?? just that the well known tax paying coffee chain Starbucks doesn't
seem to be passing the discount on to us coffee supping plebs , flat white was £3.10 today...

Nope. Its in place to EOF March 21 now i think. Definitely ongoing.

I dont think anyone is under any obligation to pass the discount on though? Its more about giving them extra revenue to "whether the storm" as it were.

[SpeckledJim]

I think it's possibly fair to say that at the moment the people trying to sell coffee maybe have a greater need than people who buy £3 coffees.

[powerstroke]

SpeckledJim said:

I think it's possibly fair to say that at the moment the people trying to sell coffee maybe have a greater need than people who buy £3 coffees.

Possibly however taking the piss won't win many friends and I do wonder how much $$$£££ they extracted
from the tax payer during lockdown while key workers couldn't get a hot drink when they were
trying to keep key industries going ...

[anonymous-user]

How are they taking the piss charging the usual prices (assuming they are)?

If the intention was to take it off the front end it would be structured differently, as per the 'help out to eat out' scheme.

[GroundEffect]

Definitely a pleb if you call it supping.

[menousername]

La Liga said:

How are they taking the piss charging the usual prices (assuming they are)?

If the intention was to take it off the front end it would be structured differently, as per the 'help out to eat out' scheme.

I think the intention was to encourage consumer spending. Its been structured in a way that gives the seller a choice whether to maintain prices and bank the margin, or reduce prices and go for volume. Badly executed, perhaps.

[number2]

Price + vat is what is paid by the consumer

If what's paid by the consumer doesn't change, and vat is reduced, the price charged has increased.

I take no view on this, but those are the facts.

[Deep Thought]

menousername said:

La Liga said:

How are they taking the piss charging the usual prices (assuming they are)?

If the intention was to take it off the front end it would be structured differently, as per the 'help out to eat out' scheme.

I think the intention was to encourage consumer spending. Its been structured in a way that gives the seller a choice whether to maintain prices and bank the margin, or reduce prices and go for volume. Badly executed, perhaps.

TBH i never saw the VAT reduction as a way to encourage consumer spending. I saw it as a way to help businesses to survive. From the Governments website - "to support businesses severely affected by forced closures and social distancing measures"

https://www.gov.uk/government/publications/revenue...

I think in particular some hotels have used it to structure "deals" but in general its not been passed on to the consumer.

[Deep Thought]

number2 said:

Price + vat is what is paid by the consumer

If what's paid by the consumer doesn't change, and vat is reduced, the price charged has increased.

I take no view on this, but those are the facts.

Unless the consumer can reclaim the VAT, then the price to them hasnt changed.

[number2]

Surely they'd be reclaiming vat a the lower rate, so the price to them has changed.

[Deep Thought]

number2 said:

Surely they'd be reclaiming vat a the lower rate, so the price to them has changed.

I said unless. To the consumer the price hasnt changed for the cup of coffee - its still £3.10. Just the amount the coffee seller retains has increased.

[number2]

Deep Thought said:

number2 said:

Surely they'd be reclaiming vat a the lower rate, so the price to them has changed.

I said unless. To the consumer the price hasnt changed for the cup of coffee - its still £3.10. Just the amount the coffee seller retains has increased.

Seller sets a price and then adds on VAT which is a tax for the consumer.

Retaining more is disingenuous, they are charging more to maintain the same end cost to the consumer.

[Heartworm]

number2 said:

Seller sets a price and then adds on VAT which is a tax for the consumer.

Retaining more is disingenuous, they are charging more to maintain the same end cost to the consumer.

I thought this was the point of the scheme, to increase profit margin on reduced sales.

[2 GKC]

Deep Thought said:

Unless the consumer can reclaim the VAT, then the price to them hasnt changed.

It has because they’ve all put the price up to offset the VAT increase. And the vast majority of consumers don’t claim VAT back on coffees

[Deep Thought]

2 GKC said:

Deep Thought said:

Unless the consumer can reclaim the VAT, then the price to them hasnt changed.

It has because they’ve all put the price up to offset the VAT increase. And the vast majority of consumers don’t claim VAT back on coffees

The price to the consumer hasnt changed. The only way it would have changed would be if the consumer could reclaim the VAT.

As end consumers, we're not paying more.

Edited by Deep Thought on Thursday 24th September 21:10

[Deep Thought]

number2 said:

Deep Thought said:

number2 said:

Surely they'd be reclaiming vat a the lower rate, so the price to them has changed.

I said unless. To the consumer the price hasnt changed for the cup of coffee - its still £3.10. Just the amount the coffee seller retains has increased.

Seller sets a price and then adds on VAT which is a tax for the consumer.

Retaining more is disingenuous, they are charging more to maintain the same end cost to the consumer.

From the gov's website, the suppose is "to support businesses severely affected by forced closures and social distancing measures".

Increasing profit margins from less sales.

[number2]

Heartworm said:

number2 said:

Seller sets a price and then adds on VAT which is a tax for the consumer.

Retaining more is disingenuous, they are charging more to maintain the same end cost to the consumer.

I thought this was the point of the scheme, to increase profit margin on reduced sales.

It's certainly been the outcome. Consumers subsidise coffee shops and the rest of the population subsidise the VAT reduction.

[Burwood]

powerstroke said:

SpeckledJim said:

I think it's possibly fair to say that at the moment the people trying to sell coffee maybe have a greater need than people who buy £3 coffees.

Possibly however taking the piss won't win many friends and I do wonder how much $$$£££ they extracted
from the tax payer during lockdown while key workers couldn't get a hot drink when they were
trying to keep key industries going ...

I gave up buying shop coffee( Starbucks) with my 620 cal scone in ooh about 2003. Garbage. I make my own at least 5 times a day. It’s actual coffee. It probably costs less too

[jamoor]

I thought it was to boost profits rather than make it cheaper for the end user.

Althoguh there's nothing stopping them trying to stimulate demand by reducing prices by the VAT amount.