VAT rises and modelling costs

[Nick]

On January 1st 2011 the UK's standard rate of Value Added Tax on goods will rise from 17.5% to 20%. Do we have any idea what this means for the cost of our hobby?

I don't think this VAT rise will mean a great deal in terms of low price things like model kits. If a kit costs £6 before, the actual rise will bring the price up by 13p. The kit should then cost £6.13 but will really go to £6.15 or higher.

If we're lucky the retailer might choose to absorb the rise in some cases but it is most likely that all prices will eventually rise.

There will be a hit as people prefer the psychological effect where it's better to buy at £5.99 "less than £6!" than to spend over the £6 mark but that will wear off a little over time. But is it time for pricing to reflect the actual costs rather than having a kind of standard price across the shop?

[GTX]

Yikes!!  Our rough equivalent of the VAT, the GST (Goods and Services Tax) is only 10%!!!!

Regards,

Greg

[Fulcrum]

Yikes!!  Our rough equivalent of the VAT, the GST (Goods and Services Tax) is only 10%!!!!

Regards,

Greg

Of course, our "fearless" prime minister & my provincial premier combined their GST & PST into a HST(Harmonized Sales Tax), which unfortunatly pissed off a lot of people.

Same thing in British Columbia, though the provincial premier is leaving office due to the outcry over it.

[Taiidantomcat]

Happy I don't have this to worry about...yet. 

[raafif]

an xtra 3% VAT won't scupper my trip to England next year but it will curtail some planned excursions & purchases.  Probably spend more time researching family history (since 1588) in the local town archives.

[Mossie]

There's also a fair chance that retailers (not just models) will use VAT rise to hike up prices even higher as we don't tend to carry calculators around & won't really know if it should be a twenty pence or a pound.

[buzzbomb]

an xtra 3% VAT won't scupper my trip to England next year but it will curtail some planned excursions & purchases.  Probably spend more time researching family history (since 1588) in the local town archives.

In the same boat, heading to the UK next April.. but really the cost of something is the cost of something don't curtial doing what you want to do, over a few dollars/pounds/euro. I rationalise it by using the "when is the next time I will get here" analogy.
Lots of things in the UK you can get the VAT back (depressingly beer is exempt!).. annoying reciept keeping but worth the admin hassles at the airport to get some of your dough back.

I will be "digging up dead relatives" as well up in Yorkshire

[Hobbes]

Yup, for a holiday trip the extra £2,50 per £100 spent isn't going to kill you.

[NARSES2]

It will have a minimal effect on our hobby IMHO unless you are buying something expensive like a top of the range airbrush set up. If you are prepared to pay over £100 for Trumpeter/Tamiya's latest 1/32 model then the extra £2.50 won't put you off. The real problem is, as Mossie says, a lot of retailers will round up the cost of goods so things like paint/glues/fillers etc will probably see a larger proportional rise.

A suprising thing, or is it ?, is that the VAT regs are so complicated, and there is more then one rate, that a lot of people are not certain of the items on which VAT is levied. There are some strange ones where it is and equally strange where it isn't  

Most of the stores selling major items like furniture and electrical goods will do a "VAT held" promotion in January, so that will ease the pain if you want a new TV. Wether the January reduction will be reduced is another thing   As for electrical goods, then the deflation in these is so fast that any increase in VAT will be offset in 6 months or so.

Of course the one group who will take huge advantage of it are the Brewers and Licensing Trade   Should string a couple of the so-and-so's up to show the others not to exploit the working classes   Of course they will have another go at dodgy price increases when the new variable duty on alcohol takes effect. Who on earth picked 7.3% and 2.8% as the upper and lower markers for the standard rate ? And of course it will not be applied to wines and spirits - come the revolution ??