The Manx Office of Fair Trading has conducted a survey of a wide range of larger businesses on the Isle of Man to find whether they are passing on the 2.5% reduction in value-added tax to consumers.
The survey was conducted following the United Kingdom government’s decision to reduce value-added tax to 15% temporarily until December 31, 2009.
The survey showed that the vast majority of businesses questioned are passing on the reduction. Because of the volume of work involved in changing individual price tags it will take some time for prices shown on price tags or shelves to be adjusted. However tills have been programmed to charge the VAT at 15% instead of 17.5%.
Exceptions to this tend to be those businesses where the majority of goods sold are at the zero rate of VAT such as food or newspapers or those where an increase in the duty paid on the goods effectively cancels out any VAT saving such as transport, fuel, alcohol or cigarettes.
Chairman of the Office of Fair Trading, Bill Henderson, commented on Wednesday:
“I made reference to this issue in the House of Keys this morning and I am very encouraged to find so many businesses are passing on the reduction. It’s a lot of work for businesses to change all price tags and I would ask consumers to be patient with the process of re-pricing individual items. If people are concerned that they may not receive the reduction they should ask before they buy if the prices have been reduced. If they haven’t and the items are available in another shop they may wish to take their business elsewhere.”
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