Averting UK Sales Tax Change Disaster

For those people that charge monthly rentals for their products, last December was an uncomfortable time.  In my opinion a political folly, VAT (UK sales tax) was reduced from 17½% to 15%.  It is set to revert back Jan 1st 2010.  The negative impact is becoming clearer as I talk to people that charge like I can do.

When those payments are made via standing order, rather than direct debit, several customers it seems have realised the chance appears to downgrade their cover.  The moment someone in finance has to do some work, questions are asked about whether the service can be reduced, even done away with.

I now have confirmed cases of lost sales as a result.  To such an extent, that when the rate is set to rise back, it’s worth taking the 2½% hit on the tax, and simply keeping the gross amount the same.

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