How can the new rate of VAT be handled in shops and webshops?

Re-pricing a whole product range in a shop or web shop can be a major and costly exercise. One approach is to continue to price at 17.5%, but set up a discount code on the tills or webshop that can be applied to every sale. The discount rate is around 2.1%, not 2.5% (* see below).

On web sites the discount is often known as a "promotional code".

Currys have implemented this approach immediately, before 1 December, effectively passing on the VAT reduction at their own expense for the next few days.

Re-pricing and re-labelling can then be done at a time of the retailer's choice.

But care needs to be taken where a shop provides items that are not all standard rated.

* The discount to be applied is (117.5-115)/117.5 x 100% = 2.128%