back to article Amazon intros early VAT cut

The government’s VAT cut doesn’t take effect until Monday, but one online retailer just couldn’t wait and has already introduced it. Amazon has created a promotional code called “LOWERVAT” that’ll give you a reduced rate of VAT instead of the full 17.5 per cent. Presumably Amazon’s decided to take a small financial hit on …

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  1. Anonymous Coward
    Anonymous Coward

    oh bum

    I'd just done most of my Xmas shopping on Amazon too. Ah well, it would only have saved me the price of a pint. Life goes on.

  2. Paul

    Refund if price goes down

    I believe Amazon have a, somewhat hidden, policy that if the price of something you have bought from them goes down within a specific period you can claim a refund to take you to the lower price. I wonder if that would also apply in the case of items bought before the VAT is reduced compared to prices after?

  3. Flugal

    Mumbo jumbo?

    "Firstly, the retailer’s only reduced the VAT rate by 2.13 per cent and not the full 2.5 per cent. Why? Well because of some complicated mathematical mumbo jumbo, it claimed."

    It's not too complicated. For example, if you have £100 and add 10% you have £110. Subtract 10% of £110 (i.e. £11) and you're left with £99, not your original £100.

    Same principle applies.

  4. Oliver Humpage
    Coat

    It is the full 2.5%

    If you reduce the VAT on an item from 17.5% to 15%, that's the same as applying a 2.13% discount to the original "inc VAT" price.

    So they are giving you the full VAT discount, but by reducing the total price by 2.13%. Makes perfect sense.

  5. Anonymous Coward
    Anonymous Coward

    Car

    I just placed an order for a car at the new rate of VAT, the order is placed, it's just not going to go on the books until Monday ;)

    Any reasonable retailer will make that kind of deal, it just doesn't make sense to wait, otherwise people will just hold off on purchases. Which makes the books look even worse than they probably are.

  6. Gareth Jones

    Bit slow

    They're behind wiggle.co.uk

  7. H3N0451

    They're not the only ones

    Online cycle shop Wiggle have also put their rates down to 15%:

    http://www.wiggle.co.uk/h/option/VAT

  8. Craig

    Clever

    Clever because if they didn't do it via the promo code, you would have been able to take advantage of their generous price-drop-refund scheme several days earlier :)

    But loads of retailers have done this already, Amazon don't deserve this mention tbh. Overclockers for one went down to 15% almost immediately after it was confirmed.

    I assumed these retailers aren't taking the hit, but rather doing a bit of an accounting fiddle so these orders look like they came after the weekend? Who knows...

  9. Eddie Edwards
    Happy

    You're not ...

    You're not going to tell me that this is bad because they don't offer the VAT reduction on books, are you?

  10. Anonymous Coward
    Anonymous Coward

    @Flugal

    Some more math is needed:

    Your Price: VAT: VAT Amount:

    £115 15% £15

    But £15 is *not* 15% of £115, it is 3/23 of £115.

    You can work the VAT fraction out:

    Tax Rate

    -----------------

    100 + Tax Rate

    So, VAT at 15%, the fraction is:

    15 = 3

    --- --

    115 23

    It used to be 7/47ths now it is 3/32rds

    Regards,

    SW

  11. Dogbyte
    Coat

    Call me cynical...

    But if they didn't do this nobody would buy anything until Monday.

    Mine's the one with the firmly closed wallet in the pocket.

  12. Anonymous John

    What happens if you use the code, next week?

    Do you pay tax of 12.5%?

  13. Anonymous Coward
    Anonymous Coward

    is 32rds...

    ....pronounced like thirty turds?

  14. Ben Mathews

    Also...

    www.overclockers.co.uk have been at 15% since the announcement.

  15. Stu
    Happy

    Easy Calculator

    As there's a little confusion about the fact it's not a 2.5% reduction in the cost, there's an easy calculator for the VAT change here: http://howmuchvat.co.uk/

  16. Stuart
    Thumb Up

    Free Money (if you are vat registered...)

    Ahem - they will still charge you 17.5% on a reduced pre-vat price. So if you are VAT registered you still get 17.5% back. A double discount ;-)

  17. David Gosnell

    Not the only one?

    What's the betting Alistair Darling's grasp of maths is just as questionable?

    http://news.bbc.co.uk/1/hi/scotland/7749515.stm

    In summary, our worthy chancellor and the man best placed to get us out of our current mess, oh yes, cocked up a rise in the duty on spirits supposed to exactly negate the VAT reduction, and spectacularly failed.

  18. Rob Beard
    Paris Hilton

    SVP and brastop.com

    SVP are also offering a discount until 30th November, I think it's 2.5% off or something. Sods law I just ordered some bits from them and I aint putting in a special order just to get the discount.

    Brastop.com are currently offering 17.5% off until November 30th which spurred my other half to get some new sexy undies. Good on you Alistair, in a way you've spurred my other half to spend out on something that in a way will make my day.

    Paris because I bet she's got a selection of sexy undies.

    Rob

  19. Anonymous Coward
    Thumb Up

    Pahhh

    Pixmania are giving 2.5% off

    Use the code VATCUT to get your 2.5% OFF EVERYTHING

  20. Anonymous Coward
    Happy

    @Anonymous Coward

    Yes when it comes to VAT it is always turds! And my mistake it is 3/23rds :P~

    SW

  21. Elrond Hubbard

    definitely not the first to do this

    I saw overclockers do an early VAT drop last week, then wiggle a couple of days ago - now amazon.

  22. Anonymous Coward
    Thumb Down

    Not any more...

    "I believe Amazon have a, somewhat hidden, policy that if the price of something you have bought from them goes down within a specific period you can claim a refund to take you to the lower price. I wonder if that would also apply in the case of items bought before the VAT is reduced compared to prices after?"

    Amazon discontinued this policy a few months ago (except for pre-order items) :(

  23. Anonymous Coward
    Anonymous Coward

    Just PR

    Isn't VAT a legal requirement? If so, then Amazon cannot simply decide to reduce the amount of VAT paid - that would be illegal. All they've done is reduce the amount charged to the customer - the amount of VAT on those goods is still 17.5%.

  24. Phil
    Stop

    Re: Refund if price goes down

    "I believe Amazon have a, somewhat hidden, policy that if the price of something you have bought from them goes down within a specific period you can claim a refund to take you to the lower price."

    Amazon have now dropped this policy. I tried to claim a refund last week and got the following response:

    "Further to your email, we regret to inform you that we do not extend a post-order price guarantee and only orders placed on or before September 01, 2008 are eligible for a price difference refund under the Post-Order Price Guarantee policy. We are very sorry regarding this issue."

  25. Mark Aggleton
    Thumb Up

    @Phil

    However, I pre-ordered a DVD from Amazon which was released on Monday. As the supermarkets were selling it at a significantly lower price than Amazon they have given me a fiver refund.

  26. Rob Haswell

    Me too

    I've already post-dated a few invoices.

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