Body & Soul2 mins ago
Vat & alcohol tax duty
6 Answers
Hi - hope someone can help. My daughter is getting married in April and originally booked her wedding package in June 2008. I emailed the venue to say that I presumed the cost would be reduced slightly as we should now be paying VAT at 15% instead of 17.5%. they have emiled me back saying that as the alcohol duty taxhad risen at the same time as the VAT decreased, they cancelled each other out. Are they within their rights not to decrease the VAT, if not, are they allowed to impose the alcohol duty tax on us?
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The answer depends on what you've actually agreed.
If you accepted a contract back in June to pay a given price and it was invoiced to you at that point then the VAT is correct and no refund would be due (whether you've actually paid yet or not is irrelevant).
If you accepted a quote back in June but it was to be invoiced to you in April 09 then the VAT rate change is relevant and the price should drop accordingly. Again, regardless of whether or not you've paid a deposit towards it.
If the quote given included prices of alcohol and didn't have a clause about potential rises due to increased duty then I don't believe they are entitled to change that price.
To directly answer your question, unless they've already invoiced you, they CANNOT refuse to pass the decrease in VAT on. Whether they can pass a change in the price of alcohol on to you or not (it's not directly relevant that this may or may not be due to an increase in duty, the hotel itself does not pay that, the cost of drink to them will have changed of course but it may well have done anyway between June 08 and April 09) depends on what you contractually agreed with them at the time. If they quoted a price for alcohol then no, I don't believe they are entitled to change it just because duty went up.
Of course, whether you wish to make a fuss over 2.5% of alcohol is up to you? Also note, the extra alcohol duty is obviously only on alcohol. I presume you are paying for venue hire, a meal, possibly entertainment, etc. All of that should have a reduction in VAT too but no increase as they have nothing to do with alcohol duty. There's no way even if you accept the argument that alcohol duty is relevant that the increase in that can be the same as the decrease in VAT. Either way there should be a reduction (unless as I said it was already invoiced to you).
If you accepted a contract back in June to pay a given price and it was invoiced to you at that point then the VAT is correct and no refund would be due (whether you've actually paid yet or not is irrelevant).
If you accepted a quote back in June but it was to be invoiced to you in April 09 then the VAT rate change is relevant and the price should drop accordingly. Again, regardless of whether or not you've paid a deposit towards it.
If the quote given included prices of alcohol and didn't have a clause about potential rises due to increased duty then I don't believe they are entitled to change that price.
To directly answer your question, unless they've already invoiced you, they CANNOT refuse to pass the decrease in VAT on. Whether they can pass a change in the price of alcohol on to you or not (it's not directly relevant that this may or may not be due to an increase in duty, the hotel itself does not pay that, the cost of drink to them will have changed of course but it may well have done anyway between June 08 and April 09) depends on what you contractually agreed with them at the time. If they quoted a price for alcohol then no, I don't believe they are entitled to change it just because duty went up.
Of course, whether you wish to make a fuss over 2.5% of alcohol is up to you? Also note, the extra alcohol duty is obviously only on alcohol. I presume you are paying for venue hire, a meal, possibly entertainment, etc. All of that should have a reduction in VAT too but no increase as they have nothing to do with alcohol duty. There's no way even if you accept the argument that alcohol duty is relevant that the increase in that can be the same as the decrease in VAT. Either way there should be a reduction (unless as I said it was already invoiced to you).
If the contract price said " including VAT" then that is the price. If it said �x exclusive of VAt then you could argue tha you should now pay a lower rate. Anyway, I wouldn't be surprised if the contract small print includes a provision for them to change their charges in certain circumstances.
I doubt it's a battle worth fighting. What is the value of the VAT reduction on your bill?
I doubt it's a battle worth fighting. What is the value of the VAT reduction on your bill?
If it is a quote (and not a bill) and it says "includes VAT @ 17.5%) then I would think legally you would win if you wanted to make an issue of it. VAT is no longer that rate and if there's no small print allowing them to amend prices for changes in alcohol duty then they can't do so unilaterally. As I said earlier, there's no way on earth the two values offset totally anyway since the alcohol presumably isn't the only thing you are paying for (that's one Hell of a party if �8k is just alcohol!).
Clearly they are taking advantage of the VAT cut to make a bit more profit on the deal and, yes, offset increased alcohol duty.
You could make a song and dance about it and you'd be in the right but do you really want to fall out with the venue for your daughter's greatest day over �200 in �9,400? I'd be tempted to e-mail them back pointing out that there is no increase on duty on their costs as regards food and room hire etc and suggest they meet you halfway on the price? See if they are prepared to drop �100 but it's up to you if you want to push for it?
Clearly they are taking advantage of the VAT cut to make a bit more profit on the deal and, yes, offset increased alcohol duty.
You could make a song and dance about it and you'd be in the right but do you really want to fall out with the venue for your daughter's greatest day over �200 in �9,400? I'd be tempted to e-mail them back pointing out that there is no increase on duty on their costs as regards food and room hire etc and suggest they meet you halfway on the price? See if they are prepared to drop �100 but it's up to you if you want to push for it?
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