UK retailers use VAT reduction to start price war
Today has seen a number of major UK retailers step forward with reduced prices three days ahead of the official VAT reduction period. Asda, Sainsbury and Tesco are the main culprits as yet more pressure is placed on the UK high street. Many experts suggest that the majors will be able to withstand the reduced pricing, and cost to the business, while the smaller groups will struggle to attract headlines and may suffer a downturn in trade.
There is a feeling that many in the UK are holding off on further major acquisitions in the belief that price wars will spring up in literally every sector of the retail market and ensure there are better deals around tomorrow. It is this belief which is adding to the stagnation on the high street and putting many businesses at risk with cash flow severely weakened and transactions well down on the same period last year.
Many people are waiting to see whether the UK consumer will use the extra 2.5% reduction in VAT to spend more on the high street, whether they will use this to reduce their financial liabilities or perhaps increase their savings.
Share this..
Related stories
EC moves on tax evasion
The European Commission (EC) is seeking to eradicate tax evasion through an amendment to the Savings Taxation Directive, the organisation announced yesterday (November 13th).Loopholes which are exploited by tax evaders will be closed by adjustments to the directive, the EC said after accepting a proposal on the change.It is to be improved so that interest payments which come through intermediate t...
Read MoreIs Barack Obama having second thoughts about his banking levy?
In his State of the Union speech Barack Obama has backtracked slightly on his recent banking levy revelation amid signs that the US government is becoming acutely aware that it may have gone too far. This move by the US government has prompted a recovery in worldwide stock markets with the banking sector bouncing after a difficult few days. So what does this mean for the future? In a similar sc...
Read MoreHow can the economy grow with pay cuts on the way?
There is a growing fear about the state of the UK economy and the prospects 2010 with more and more companies stepping forward to confirm that they will either introduce pay freezes and/or job cuts over the next 12 months. Against this background, it is more and more difficult to see how the UK economy can improve in the short to medium term with taxation set to increase and disposable income set...
Read MoreCommons committee stokes up the pay-as-you-go motoring scheme again
Despite a move to introduce pay as you drive motoring being shot down in flames by UK motorists only 2 years ago it looks as though this particular policy may well be back on the agenda. Citing the fact that motorists no longer believe the government when it introduces tax rises for motorists in the name of "the green revolution" there is a push to put pay as you drive motoring back on the agenda....
Read MoreU.K.'s ageing population places more pressure on the public purse
The revelation that the UK population has now topped 60 million places yet more pressure on the public purse with an increase in benefit payments, pension arrangements and other social security benefits. While there is no doubt there will also be a significant increase in tax income in due course, the confirmation that there are now over 1.8 million people in the UK over 80 years of age is causing...
Read More