NOT passing on VAT letter
Discussion
We're not intending to pass on the VAT rate cut to customers and I intend to write to them to explain the reasons why.
What would be your reaction to this letter and do you have any constructive comments?
Dear x
As you are aware the chancellor announced a temporary VAT rate cut recently. Having considered the implications and the amounts involved we are not intending to pass this on. The primary reason is that we do business via Standing Order and do not wish to impose a burden on you with regard to altering payments through the bank.
When the rate returns to normal in 2010 we will intend to reduce our prices again which ensures that you continue to pay the same amount overall.
I hope you understand our reasons and this is not an attempt on our part to increase your pricing through the back door.
If you have any questions or comments please feel free to get in touch.
Hugs and kisses etc.
What would be your reaction to this letter and do you have any constructive comments?
Dear x
As you are aware the chancellor announced a temporary VAT rate cut recently. Having considered the implications and the amounts involved we are not intending to pass this on. The primary reason is that we do business via Standing Order and do not wish to impose a burden on you with regard to altering payments through the bank.
When the rate returns to normal in 2010 we will intend to reduce our prices again which ensures that you continue to pay the same amount overall.
I hope you understand our reasons and this is not an attempt on our part to increase your pricing through the back door.
If you have any questions or comments please feel free to get in touch.
Hugs and kisses etc.
If you do not pass on the VAT reduction then you will have essentially increased your price to the customer.
You will only be required to pay over the amount of VAT to HMRC as if you had charged 15%, essentially you will be trousering the difference no matter how you dress it up.
Any supplier that does that to me will most certainly be minus one customer.
You will only be required to pay over the amount of VAT to HMRC as if you had charged 15%, essentially you will be trousering the difference no matter how you dress it up.
Any supplier that does that to me will most certainly be minus one customer.
It's not trousering, I'm being very up front. That f
king badger has managed to do far more harm than good with this dick brained solution IMO.
The difference is only £4.50 per month, I'm just looking at how best to word it to my customers. We are very fair with them, today for example I'm just going into one customers to fix the MD's daughters crashing laptop as Dell have been useless... It's not included in the contract, I'm doing it FOC!
I try to conduct business with my customers as I would want a company to deal with me...
king badger has managed to do far more harm than good with this dick brained solution IMO.The difference is only £4.50 per month, I'm just looking at how best to word it to my customers. We are very fair with them, today for example I'm just going into one customers to fix the MD's daughters crashing laptop as Dell have been useless... It's not included in the contract, I'm doing it FOC!
I try to conduct business with my customers as I would want a company to deal with me...
Can you visit/ring each client and speak with them? Offer them a £50 refund in January 2010.
Whilst it is a hassle, I can't help thinking that for those of us who provide a VAT invoice, the only way forward is to adjust things and keep an eye on it.
Many retailers won't need to worry as the way they price does not show the VAT separately.
Whilst it is a hassle, I can't help thinking that for those of us who provide a VAT invoice, the only way forward is to adjust things and keep an eye on it.
Many retailers won't need to worry as the way they price does not show the VAT separately.
If the rate had been increased by 2.5% instead of decreased, would be writing to your customers informing them that since the difference is small, just £4.50 per month, that you won't be requesting the extra?
In any case ....
Would I be right in assuming you supply some form of advance invoice / VAT schedule for your service (can't imagine you invoice monthly if standing orders are involved).
If so, I'm not sure you have a choice see paragraph 10.2 http://www.hmrc.gov.uk/pbr2008/vat-guide-det.pdf
In any case ....
Would I be right in assuming you supply some form of advance invoice / VAT schedule for your service (can't imagine you invoice monthly if standing orders are involved).
If so, I'm not sure you have a choice see paragraph 10.2 http://www.hmrc.gov.uk/pbr2008/vat-guide-det.pdf
Can you calculate the cost to your business to implement the price changes now and again in 13 months time? If these costs are similar to the amount of VAT 'saved' then that is the justification you should point out to your clients.
If I was your client I could understand you not passing on the VAT cut if it would cost you money to do so, but unless you can demonstrate that it will look like you're just pocketing the savings.
If I was your client I could understand you not passing on the VAT cut if it would cost you money to do so, but unless you can demonstrate that it will look like you're just pocketing the savings.
HRG said:
It's not trousering, I'm being very up front. That fking badger has managed to do far more harm than good with this dick brained solution IMO.
The difference is only £4.50 per month, I'm just looking at how best to word it to my customers. We are very fair with them, today for example I'm just going into one customers to fix the MD's daughters crashing laptop as Dell have been useless... It's not included in the contract, I'm doing it FOC!
I try to conduct business with my customers as I would want a company to deal with me...
..run your idea by that customer and see what he/she says. Customers are unfortunately often ungrateful.king badger has managed to do far more harm than good with this dick brained solution IMO.The difference is only £4.50 per month, I'm just looking at how best to word it to my customers. We are very fair with them, today for example I'm just going into one customers to fix the MD's daughters crashing laptop as Dell have been useless... It's not included in the contract, I'm doing it FOC!
I try to conduct business with my customers as I would want a company to deal with me...
If you raise monthly invoices to VAT registered companies then you have no choice but to raise your ex-vat prices to keep the total the same. So it's a price increase.
Frankly you have no choice. Your customers will be expecting a letter requesting they change their standing order to the new amount.
Just get on and do it. I know it will cost a fortune and gain you nothing but unfortunately customer goodwill is more important now than ever and they WILL be expecting that letter.
Yes I agree - Darling is a twit. He's just cost small business an absolute fortune for no fecking benefit. Even the retail customers get such a small benefit it plain wasn't worth it.
And it's costing government £12bn. tts.
Just get on and do it. I know it will cost a fortune and gain you nothing but unfortunately customer goodwill is more important now than ever and they WILL be expecting that letter.
Yes I agree - Darling is a twit. He's just cost small business an absolute fortune for no fecking benefit. Even the retail customers get such a small benefit it plain wasn't worth it.
And it's costing government £12bn. t
ts.What will you do about Corporation Tax at year end?? You have to charge VAT at the appropriate rate..
You'll have effectively earnt more (exc. VAT which will be at 15%)..
It sounds like you need an overhaul of your billing system tbh. I know it's a pain, but surely
it's more of a pain not to.
You'll have effectively earnt more (exc. VAT which will be at 15%)..
It sounds like you need an overhaul of your billing system tbh. I know it's a pain, but surely
it's more of a pain not to.
HRG said:
We're not intending to pass on the VAT rate cut to customers and I intend to write to them to explain the reasons why.
What would be your reaction to this letter and do you have any constructive comments?
Dear x
As you are aware the chancellor announced a temporary VAT rate cut recently. Having considered the implications and the amounts involved we are not intending to pass this on. The primary reason is that we do business via Standing Order and do not wish to impose a burden on you with regard to altering payments through the bank.
When the rate returns to normal in 2010 we will intend to reduce our prices again which ensures that you continue to pay the same amount overall.
I hope you understand our reasons and this is not an attempt on our part to increase your pricing through the back door.
If you have any questions or comments please feel free to get in touch.
Hugs and kisses etc.
Who knows? Can't you just give them the difference as a bit more product. (Whatever it is)What would be your reaction to this letter and do you have any constructive comments?
Dear x
As you are aware the chancellor announced a temporary VAT rate cut recently. Having considered the implications and the amounts involved we are not intending to pass this on. The primary reason is that we do business via Standing Order and do not wish to impose a burden on you with regard to altering payments through the bank.
When the rate returns to normal in 2010 we will intend to reduce our prices again which ensures that you continue to pay the same amount overall.
I hope you understand our reasons and this is not an attempt on our part to increase your pricing through the back door.
If you have any questions or comments please feel free to get in touch.
Hugs and kisses etc.
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