Businesses may get extra time for VAT repricing
The government is considering whether to allow businesses more time to update price labels in shops once the rate of VAT reverts to 17.5 per cent at the end of the year.
The British Retail Consortium (BRC) welcomed the announcement that the government is to consult on an amendment to the Price Marking Order which would give retailers more time to change the labels when the standard rate of VAT returns to 17.5 per cent from 1 January 2010.
Under the current rules, retailers have two weeks in which to make price changes following a readjustment of the rate of VAT. The Department of Business, Innovation and Skills (BIS) is now considering whether that period should be extended to 28 days.
The BRC has been lobbying for extra time, given that the reversal of the cut to 15 per cent is taking place just after Christmas and at the busiest time of year for many retail businesses.
Tom Ironside, the BRC’s director of business environment, said: “This is a welcome indication that the government could give retailers the extra flexibility we’ve been calling for.
“Repricing tens of thousands of items is a mammoth and costly task and it has to be done during most retailers’ busiest and most commercially important time of year – a time when staff should be focused on serving customers.”
Mr Ironside urged the government to follow through on the consultation and make sure retailers have the time they need.