STL UK HAVE ANNOUNCED that following consultations with their suppliers, “in the main” they will be absorbing January’s VAT increase by adjusting ex-VAT prices to keep VAT-inclusive prices for end consumers the same. Vatable items such as CDs, for instance, currently retailing at £14.99 will continue to retail at £14.99 by means of a behind-the-scenes adjustment resetting the ex-VAT price to £12.49:
- Current: ex-VAT price £12.76 + 17.5% VAT = £14.99
- After 4th Jan 2011: ex-VAT price £12.49 + 20% VAT = £14.99
To make the adjustment on their own systems, STL’s computers will be temporarily taken down on New Year’s Day and customers are advised against placing online orders “from 4pm on 31st December until 9am on 3rd of January.” Any queries should be addressed to STL’s Customer Services department.
Printed books, of course, remain zero-rated for VAT. Retailers will still need to make the appropriate adjustments in their own accounting and VAT returns to HM Revenues & Customs.