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Independents slam tax proposals

Independent retailers polled by Drapers this week slammed the 2.5% VAT cut as an out-of-touch move made by the government which they do not plan to pass on to their customers.

Selected indies said they had already been forced to start discounting ahead of Christmas, which meant the 2.5% reduction would be lost among the other price cuts.
Other indies said their limited IT and till systems would be unable to cope with implementing a blanket VAT markdown as seen at the multiples.

Lesley Emochs, manager of Raffles in Maidstone, Kent, said: “I don’t plan to do anything at all. Why should I do anything? That’s 2.5% that people aren’t spending,” he said.

“When I ordered the stock I paid full VAT on it. If I reduce my prices like the high street is, customers will expect more and more discounts to follow.”

Many indies argued that the cut was too small to have a real impact on shopper spending.

Joanne Brown, owner of womenswear retailer Indigo in Wollaton, Nottingham, said she would discount her stock rather than pass on the tax cut.

“I’m not planning to do anything,” she said. “I will have special offers instead. I think it is an insult to the customer and they will not be fooled.

“[The cut] is nothing and is not worth it when we are already offering upwards of 10% discounting on a lot of our stock. Adding another 2% off would look ridiculous.”

Susie Hammond, owner of womenswear store Strawberry in Chichester, West Sussex added: “We are offering 25% discount already and we don’t want to do another 2.5% because of this tax cut. We are trying to get our heads around it.

“Our tills don’t have a way to automatically deduct the amount so we will have to mark things down individually.”

British Shops and Stores Association chief executive John Dean said: “Not only are prices already falling on the high street, but there will be a cost to independent retailers in implementing this change in VAT.”

On its website the BSSA said that although implementing the VAT cut was not compulsory, it would be encouraged by government, and failing to cut prices would irritate shoppers.

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