VAT – so it went back up, but has it affected Local Businesses and Customers in Bridgend?

What it means for customers

 The VAT has gone back up, and many of you are no doubt noticing prices increase because of it.

Have you noticed you may be trying to spend less and are worrying more about ever increasing charges for services you need?

You need to ensure that you use reputable Local Businesses who have taken time to think about how their pricing and the VAT change affects their customers.

What it means if you are a VAT Registered Business in Bridgend

Have you increased your prices?

competitive amongst other people offering similar services? f you have increased your prices, are you sure that you are giving good value for money and are ensuring that you are still

Don’t forget – a VAT registered plumber charging someone £100 in total is only retaining £85.11,(as they have to pay £14.89 Vat to HMRC) as oppose to a non VAT registered plumber who will keep the whole £100. The customer is still paying £100 either way, but the VAT registered plumber is retaining less of it.

competitive.

Still charging the same TOTAL price to customers as you were when VAT was 15%?

You are now getting less "Profit" on your goods and services than you were last year- that is obviously not good for your business either.

This is a good example of where CC Associates Accountants can work with you, as a Client, to explain the maths and turn it in to real life situations and explanations that affect your business in Bridgend. We can suggest ways to help you get your pricing right, every time.

CC Associates have extensive experience in VAT,( not just the calculation of it and producing VAT returns), but looking at how it affects you Local Business in Bridgend, and ultimately, your customers, who keep you in business.

CC Associates can also apply the same "real life" explanations in plain, easy to understand advice in other areas of your business, such as Tax and PAYE, if you have employees.

If you think that the accounts for your business are just numbers that happen at the end of a year and define how much Tax you pay, you really need to talk to CC Associates. Let us make the numbers mean something to you and help you to grow your business by understanding how those numbers can be put into actions to change how you do business and become financially more secure in these alarmingly difficult economic times.

VAT - how it affects what you spend!

Cost of goods VAT you pay Total you spend

£8.51                   £1.49                     £10.00

£42.55                  £7.45                    £50.00

£85.11                 £14.89                  £100.00

£851.06              £148.94                £1000.00

Let’s look at an example of buying fuel.

You put £10 worth of fuel in your car.

You have actually only bought £8.51 worth of fuel, the remaining £1.49 is VAT that has been charged. (The fuel station collects this £1.49 and pays it over to HMRC Vat Office).

You can see therefore, that on a large item, say a television, that you pay £1000 at the till for, that you actually paid £851.06 for the television itself, and you paid £148.94 in VAT!

Back last year, (when the VAT rate was temporarily reduced to 15%), we all enjoyed getting £8.70 worth of fuel and paying only £1.30 of VAT.

If the VAT registered plumber then decides to charge £100 PLUS Vat, the customer pays £117.50, which is £17.50 more than they would have to pay the non VAT registered plumber. Where is the customer going to spend their money if that is the case? This makes the VAT registered plumber less

If you have increased your prices are you still