VAT Drop on local takeaways - none of them passing it on

Zebra3 · 08-08-2011 08:35PM

Why is the government encouraging people to eat crap?

Gummy Panda · 08-08-2011 08:44PM

Zebra3 wrote: »

Why is the government encouraging people to eat crap?

The reduction isn;t just for take aways. It was designed to lower prices in hotels, restaurants, etc to boost tourism.

Amirani · 08-08-2011 09:12PM

slavetothegrind wrote: »

maybe it allows the businesses maintain their current levels of employment a bit longer?

are you really going up the road to save 8c on a 2.20 bag of chips?

just sayin'

costs of running businesses are still very high, fuel still on the rise...

and no, i don't own a chipper.

Fuel is falling at the moment. Just sayin.

veryangryman · 08-08-2011 10:01PM

mick.m wrote: »

Am I the only one that thinks that that's a fair amount of chippers to visit in a month and a bit?

Walk by the door, see flyers etc in addition to the odd visit but thanks for your concern :rolleyes:

mconigol · 08-08-2011 10:25PM

Ring them up for a quote. Places usually quote prices ex-vat don't they?

ibarelycare · 08-08-2011 10:27PM

Hot takeaway food that isn't eaten on the premises is considered "supply of goods" not "supply of service." It's still charged at the service VAT rate though (13.5%) but because it's not a service I don't think the new 9% VAT rate comes into play for them, it's only for premises where there are facilities to sit and eat food. I could be wrong but that's my understanding of it.

stek · 08-08-2011 10:27PM

I agree with the OP!, You can be sure if it was a VAT increase the cost would have been passed on to the customer.

Aard · 08-08-2011 10:44PM

ibarelycare wrote: »

Hot takeaway food that isn't eaten on the premises is considered "supply of goods" not "supply of service." It's still charged at the service VAT rate though (13.5%) but because it's not a service I don't think the new 9% VAT rate comes into play for them, it's only for premises where there are facilities to sit and eat food. I could be wrong but that's my understanding of it.

"Eat-in" always has a higher VAT than "to go". You see this in a lot of cafés where the take-away styrofoam cups are bigger than the proper cups in the store. This allows them to charge the same for both, but because they pay a higher tax for the "eat-in" variety, they give you less of it in order to compensate.

I'm not exactly sure how that translates to chippers and takeaways. However, the 13.5% wasn't just a "services" rate -- it was a catch-all "lower" rate (I think officially the EU call it a reduced rate). So while the majority of things covered by it are services, there's nothing precluding goods from being included too.

In fact, here it is from the horses mouth: http://www.revenue.ie/en/tax/vat/rates/rate-changes-jobs-initiative.html

Supplies of goods and services at the new 9% rate:
the supply of food and drink (excluding alcohol and soft drinks) in the course of catering or by means of a vending machine (See footnote 1)

hot take-away food and hot drinks

hotel lettings, including guesthouses, caravan parks, camping sites etc

admissions to cinemas, theatres, certain musical performances, museums, art gallery exhibitions

amusement services of the kind normally supplied in fairgrounds or amusement park services

the provision of facilities for taking part in sporting activities by a person other than a non-profit making organisation

printed matter e.g. newspapers, brochures, leaflets, programmes, maps, catalogues, printed music (excluding books)

hairdressing services (Note: beauty treatments:- for example, facials, massages, nail treatments, tanning or sunbed services etc., remain liable at the 13.5% rate).

Taxi Drivers · 11-08-2011 01:40PM

It looks like the VAT reduction is not being passed on. See details from today's consumer price index here.

Dave_Kilkenny · 11-08-2011 01:47PM

For all the people saying VAT on the raw foods... raw foods arent taxed in this industry we can't claim VAT back on the raw freshly cut chips we buy in, or the meat for the burgers.

Secondly, lets say these are the prices for a few items on the menu,

CHIPS : 2.00
SALAD BURGER : 2.30

With the reduction,
1.84
2.12

Prices are now uneven and **** up change.

Also, most chippers are small and aren't going to go print up a whole new large menu (For in the store) stating a tiny saving for the customer, it would cost a chipper about 50euro to get a large new menu done up atleast,

stovelid · 11-08-2011 02:00PM

veryangryman wrote: »

Every one in Athlone, Newbridge, Galway, Dublin:

They have takeaways in Athlone?

ibarelycare · 11-08-2011 03:03PM

Dave_Kilkenny wrote: »

For all the people saying VAT on the raw foods... raw foods arent taxed in this industry we can't claim VAT back on the raw freshly cut chips we buy in, or the meat for the burgers.

Secondly, lets say these are the prices for a few items on the menu,

CHIPS : 2.00
SALAD BURGER : 2.30

With the reduction,
1.84
2.12

Prices are now uneven and **** up change.

Also, most chippers are small and aren't going to go print up a whole new large menu (For in the store) stating a tiny saving for the customer, it would cost a chipper about 50euro to get a large new menu done up atleast,

So what if the prices are uneven, it's not fair that businesses are going to be making more of a profit, when this reduction in VAT was brought in mainly to benefit them.

They don't even have to get those big new menus printed up, they could put a big sign saying something along the lines of "Although the prices on the menu are the same, we are passing on the VAT reduction and the difference will be calculated at the till." Simple.

KindOfIrish · 11-08-2011 03:07PM

Gummy Panda wrote: »

The reduction isn;t just for take aways. It was designed to lower prices in hotels, restaurants, etc to boost tourism.

VAT reduction has never been designed to lower prices. It has been done to reduce tax pressure on businesses and give them opportunity to keep employees or even hire more staff.

veryangryman · 11-08-2011 03:09PM

KindOfIrish wrote: »

VAT reduction has never been designed to lower prices. It has been done to reduce tax pressure on businesses and give them opportunity to keep employees or even hire more staff.

Which they might be able to do if they pass on the reduction (attracting more paying customers in the doors)

Nah thatd be sensible...sure only the Supermarkets do that and they dont make any money from doing it.

Oh wait...

Aard · 11-08-2011 03:17PM

Dave_Kilkenny wrote: »

Secondly, lets say these are the prices for a few items on the menu,

CHIPS : 2.00
SALAD BURGER : 2.30

With the reduction,
1.84
2.12

Prices are now uneven and **** up change.

Round it up to €1.85 and €2.15 -- I don't think anybody would be upset. Or even just €1.90 and €2.20 to keep things in even tens.

Also, most chippers are small and aren't going to go print up a whole new large menu (For in the store) stating a tiny saving for the customer, it would cost a chipper about 50euro to get a large new menu done up atleast,

This is something that I've thought about. I imagine a lot of the business affected by the reduction in VAT are small "mom and pop" style shops. As you say, getting a new menu printed could easily cost more than what you'd get back in increased sales. There are little innovations you could implement -- I remember when the VAT on certain restaurant foods in France was reduced a lot of places just put a sticker or similar beside the item, which indicated "this item is reduced" without being specific. Or if it's a chipper, I have often in the past seen them put a sticker over the old price with a new increased price on it. No reason this can't work the other way around.

Actually another thing I've thought of is that if you keep the prices the same, you're effectively increasing your profits by 3.6%. In no time, this extra cash could afford you a new menu and then you can lower your prices!

That may be a little bit facetious, but there's something in there all the same.

Either way, I would encourage at least SOME passing on of a price reduction to the customer. For example, print up a poster (not gonna cost an arm and a leg) that offers a €4.00 meal deal of chips + salad burger. Now you've passed the VAT reduction on to your customer (at least on these two items), while at the same time keeping your old prices intact.

All it takes is a little innovation. The customer loves seeing "deals" and "sales" and "reductions". Even if they don't buy your chips + salad burger and just go for the batter sausage, they'll feel kinder to you for having the option. OTOH as this thread and others show, if you show no innitiative your customers will think you're a scrooge.

VAT Drop on local takeaways - none of them passing it on

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