Retailers pay high price for VAT cut
UK retailers suffered “significant” extra cost as a result of the VAT cut in November, according to research conducted in the aftermath by finance system supplier, Coda.
Although most retailers found the implementation of the change in their
finance systems was fairly painless, they took a hit totalling several thousands
of pounds from the cost associated with changing price tags, communicating price
changes and setting a round number price point to items. Some of this additional
cost also came from customer refunds.
In a poll conducted in December,
Coda
said it found many of its retail clients – which include big high street
retailers such as Debenhams, Ikea and Next – did not believe the VAT cut would
have any effect on Christmas sales and said these business would face the same
problem when VAT rates were restored in 2010.
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