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Are you ready for the VAT increase yet?

Tuesday 22nd December 2009

Standard VAT rates are due to increase on January 1st from 15% to 17.5% meaning many price changes in your store. If you do not want to be ‘subsidising’ your customers these changes need to be made!

Changes to the VAT rate coming into force on the 1st January 2010 will require that retailers make a number of changes in their shops just when they’re having to cope with the problems of running and staffing their shops over the festive period.

Of course, retailers with scanning systems will have it a lot easier than the stores that still price mark all their goods but there are still a lot of  shelf edge labels to change, unhappy customer issues as they notice the price increase, and accounting issues to cope with.

Running a SPEDI system can help in a number of ways:

- Prices on the back office system can be changed en mass using the VAT change utility to change the VAT rate on the back office system

- Shelf edge labels with the new prices can be printed by category so it’s easier to find the product to change

- Detailed end of day reports give you precise dates and totals for products sold

With the ‘technicalities’ sorted out you’ll have time to focus on informing customers about the change in VAT rate and how it will affect them, as required by the ‘Price Marking Order’. Warning of the price increases need to be clear to the customer before they reach the till.

Policies also need to be set up for the case for returns of products and account customers that all staff need to have a clear understanding of. This information also needs to be made available to the customers where it has an impact on them. It is advisable to get staff to walk the shop floor and report on areas where they feel the pricing of goods is unclear to the customers.

If you are unclear on any thing you should be able to take a look at the letter you should have received from the HMRC (or take a look at the website www.hmrc.gov.uk) or talk to your accountant as the final details will differ depending on the VAT scheme your store uses.

If you have not received your VAT change utility, please contact your dealer.

There is much scope for unhappy customers, justifiable or not, but with clear information hopefully all parties can at least understand the increase, even if they don’t like it!