CHANGE IN VAT RATE

Q1 What’s changed?

The standard rate of VAT has been reduced from 17.5% to 15%, as of 1 December 2008. All other VAT rates (zero, and reduced) stay the same.

Q2 Which products does the standard rate of VAT apply to?

Most products we sell are inclusive of VAT, however there are certain ranges that are exempt. Specific examples of these are Books and Food.

Q3 Do retailers have to change their prices (and so pass on the VAT reduction to their customers)?

The Government is making this VAT rate change as part of a broader package of measures to give the economy a boost. Passing on the VAT reduction through reduced prices will stimulate consumer spending, and mean that both businesses and consumers benefit from the change. Past Times are passing on this saving in full on all applicable products.

Q4 VAT has been reduced by 2.5% - why have I not received a 2.5% discount?

The prices on our website have been reduced to reflect the change in the VAT rate. Due to the slightly complicated way the pricing works (see below for example) each price has actually been reduced by 2.13%.

Example:

• A product selling for £10 has a price excluding VAT @ 17.5% of £8.51
• If you apply the new VAT rate of 15% to the price excluding VAT (£8.51), it gives the new price of £9.79
• The new VAT rate equates to a saving of £0.21 (£10 - £9.79 = £0.21)
• This equals the same as taking 2.13% (or 21p) off the original £10 price