Which retailers will abuse the VAT increase next month?

15 December 2010

VAT, earlier today

On January 1st 2010, VAT on goods sold increased from 15% to 17.5%. The lower rate had been introduced by the Government in December 2008 in a bid to stimulate retail sales, and while the there was no obligation to change prices, there was plenty of shenanigans going on.

For example, when VAT was lowered to 15%, H&M manually passed on the discount for a couple of months before continuing to charge at the higher rate of 17.5%. When VAT was increased back to 17.5% at the beginning of 2010, H&M told customers their prices would not increase and that H&M would pay the difference themselves - even though they were already charging customers 17.5%.

It was a cheap stab at positive PR by H&M, and more of the same is surely on the way. In just over a fortnight's time on 4th January, you can expect more companies to spin the latest increases to their own advantage, with businesses citing the introduction of 20% VAT to justify unwieldy increases. Some are already at it; Fitness First have told members the increase is forcing them to increase membership rates, but rates far outstrip VAT.

So once again we're asking avid readers to help us spot those retailers who play unfair by consumers, who say they're reacting to VAT increases but use it as an excuse to ramp up their price tags. We're not bothered about retailers rounding up to the nearest penny, or those that have the decency to admit their prices are increasing regardless - we want those that deliberately mislead their customers.

Keep an eye on prices as they are now, and get in touch if you spot VAT-related shenanigans in January by emailing [email protected]

16 comments

  • kfcws
    I'd expect Tesco to be amongst the first to blame VAT increase for pushing prices up another 10-20%
  • PokeHerPete
    So when do our salaries go up to account for this increase too?
  • Marky M.
    I'd expect the supermarkets to ease their prices up now (if they haven't already) so in the new year they can claim that they are "absorbing the increase", even though they've done nothing of the sort.
  • DP
    I noticed the other day that one of the Pound shops will start charging for carrier bags to cover the VAT increase.
  • Delenn
    From what I have seen recently, most of them don't need an excuse to put prices up. I suspect the recent price inflation we have already seen is to take advantage of customers "buying early to beat the VAT increase."
  • CD
    O2 Have felt the need to text me twice and email me to let me know that they will be putting prices up from the 1st of Jan..
  • M4RKM
    Three are upping the price of my iPad 10gb data sim from £15, to £15.99 which, as stated in the letter, more than VAT, but because of the cost of shit going up in price.
  • PokeHerPete
    @M4RKM, well you already wasted around £429. You must have the budged to pay a extra £12 for the year!!
  • PokeHerPete
    budged = budget, not budgey
  • FUZZCHOPZ
    Went into GAME today apparently they are already implementing the VAT hike instore as I was told by my mate who works their one Example Donkey Kong Country Returns has gone up to £42.99 so if the SRP on that is £39.99 the new price should be an extra 80p who is making a killing their if they do that to all their prices.
  • pedanticpete
    @PokeHerPete that would be £11.88 for the year
  • scl
    a repeat for 2011 ...
  • footy
    Barnsley fc are increasing ticket prices from 25 to 26 pound, 22 to 23 pound and 15 to 16 pound due to the vat rise. You do the maths.
  • VAT B.
    [...] week we asked for your help in keeping an eye on retailers when VAT increases on 4th January. There’s no doubt that plenty of businesses will take the opportunity to ramp [...]
  • Bill
    Sky are round up 'to keep things simple'. I'll get stung for 4p per month. Not a lot, but over their millions of customers they'll make a tidy profit. http://www.sky.com/helpcentre/account-and-billing/vat-form/index.html
  • VAT B.
    [...] Following our plea last week, avid Bitterwallet readers are on the lookout for companies trying to hoodwink consumers with regards to VAT increases in January. It seems Play.com are pushing their pre-Christmas sale, with notices all over the website, urging customers to “Shop now to BEAT THE VAT INCREASE while you can”. [...]

What do you think?

Connect with Facebook, Twitter, or just enter your email to sign in and comment.

Your comment