Yellow Brick Road Consulting – Press Release 25th November 2008
Don’t let the Decrease in VAT Increase your costs
So how will the recent cut in VAT affect local small and medium sized businesses? Will the impact have a positive effect or not? A recent release from Wise & Co states the following:
“In a move that will affect all businesses registered for VAT, the standard rate of VAT has been cut from 17.5% to 15%, effective from Monday 1 December 2008. The rate will remain at 15% until 1 January 2010 when it will revert to 17.5%.
Zero-rated supplies, such as basic foodstuffs, children’s clothing and books; exempt supplies, such as education and health; and supplies subject to VAT at 5%, such as domestic fuel and power are not affected by this change.”
There are other small changes to the legislation detail but the key point is whether any potential benefit from increased sales from non VAT registered customers will outweigh the incremental administration benefit for business. Probably not is our view. Customer activity is unlikely to be radically changed by this small reduction in the cost of products and the increased administration is a pain.
In this market businesses are much better off looking at the bigger picture. Are they doing the business basics right? In business we are no longer order takers as we have been for the last ten years. We have to work much harder for our sales and ensure that the sales that we do make contribute fully to the bottom line. Only the most efficient businesses will come out of the current economic situation on the front foot.
For more information on how Yellow Brick Road can help your business get the business basics right call the contact numbers noted below.
Alex Warren
Yellow Brick Road
www.yellowbrickroadconsulting.co.uk
Office: 08447 706320
Mobile: 07771 682673
Don’t let the Decrease in VAT Increase your costs
So how will the recent cut in VAT affect local small and medium sized businesses? Will the impact have a positive effect or not? A recent release from Wise & Co states the following:
“In a move that will affect all businesses registered for VAT, the standard rate of VAT has been cut from 17.5% to 15%, effective from Monday 1 December 2008. The rate will remain at 15% until 1 January 2010 when it will revert to 17.5%.
Zero-rated supplies, such as basic foodstuffs, children’s clothing and books; exempt supplies, such as education and health; and supplies subject to VAT at 5%, such as domestic fuel and power are not affected by this change.”
There are other small changes to the legislation detail but the key point is whether any potential benefit from increased sales from non VAT registered customers will outweigh the incremental administration benefit for business. Probably not is our view. Customer activity is unlikely to be radically changed by this small reduction in the cost of products and the increased administration is a pain.
In this market businesses are much better off looking at the bigger picture. Are they doing the business basics right? In business we are no longer order takers as we have been for the last ten years. We have to work much harder for our sales and ensure that the sales that we do make contribute fully to the bottom line. Only the most efficient businesses will come out of the current economic situation on the front foot.
For more information on how Yellow Brick Road can help your business get the business basics right call the contact numbers noted below.
Alex Warren
Yellow Brick Road
www.yellowbrickroadconsulting.co.uk
Office: 08447 706320
Mobile: 07771 682673
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