To cut the VAT or not, that is the question

GOT THE VAT RECEIPT?

Whether 2.5% off VAT will make any difference to your e-commerce site sales remains to be seen but has anybody worked out the cost of implementing and dare I say it, promoting the change?

And what great timing – a week’s notice just before what should be the busiest month of the year – the time that Americans refer to charmingly as ‘the PGP” or “Primary Gifting Period”. Suddenly ‘Xmas’ seems almost poetic.

But we digress.

If your site adds VAT at the end of the Checkout process, you shouldn’t incur much, if any, cost and any additional sales will be a bonus.

If on the other hand, your products are priced inclusive of VAT, you’ve got some decisions to take and will probably need to spend some money on systems changes.

Firstly, do you pass on the VAT change as a straight reduction? If you’re pricing at traditional price points like £24.99, your new price would be £24.37 – sexy huh? Most retailers are likely to slash prices more dramatically or pocket the difference.

And what if your online store sells some products that attract VAT and some that don’t? Could be some midnight oil to burn with all those manual changes. Probably the best way to do this with a MySQL database will be to extract a table of prices, amend them and upload.

There may be other places where the rate and prices have to change too but our coders are good at identifying where these are likely to occur so we’re confident we can deal with our clients’ sites.

It will cost them twice though – once now and again in 12 months’ time to change back - so is it all worth it?

This entry was posted on Thursday, November 27th, 2008 at 5:53 pm and is filed under Ecommerce, Marketing Services. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.