VAT cut reduces campsite fees by 12.5%

[antiquesam]

As has already been said smaller sites won't be VAT reg and will not be able to pass on the cut. Don't be too harsh with peoplr.

If they are not Vat registered then of course they can't pass on a reduction because they aren't charging it, but that can really only be the small cl and cs sites, but even fish and chip shops should be registered now I would have thought.

 

[antiquesam]

My thoughts are that the VAT relief is mainly intended for the business operator.
Most who visit campsites can afford the full fee..I say let the campsite have the extra.

Slightly different model for "mass tourism" where the operator may wish to pass on say 50% of the saving to encourage more punters.
I guess this sharing model goes for restaurants and the like !

Provided they are prepared to inform their customers that they are increasing prices then that is fair enough, but only last week the government were warning companies not to increase prices to compensate for losses.

 

[in h]

It will only apply if the site you are visiting is VAT Registered. A lot of the smaller CL / CS sites won't be. The Government have got to do something to get the economy moving again. Our neighbour over the road is scared to death about going anywhere. If he orders Fish and Chips his daughter picks them up for him

Very wise. It makes sense to wait until the end of July before easing off.

 

[vwalan]

best not use campsites .
they get full of campsite dwellers , most peg out mats ,put chairs and tables outside . cook on bbq,s leave gas bottles outside piped into their campers .
make a right mess and give wildcampers a bad name.
far nicer to be wild camping nowhere near campsite dwellers ,no mess just look like you have stopped for a rest.
rubbish etc can be put in bins up the road for sure.

 

[r4dent]

Mutual benefit of business and customer makes good sense win / win

If a vat reg site is charging £30 per night then under current rules is netting £25 per night after Hmrc get their cut.

Under the new rules at the same price point the site nets £28,57 ... so an increase in margin of £3,57 if no benefit passed to the customer

So in theory there is £,3,57 to carve up between supplier and customer so opportunity for win win the savings even greater on larger amounts

The only way the supplier can "share " the benefit is by reducing the VAT inclusive cost
Vat inclusive Pricing
Old Rate Customer cost £30 / Supplier £25 / HMRC £5
New Rate Customer cost £30 / Suppler £28.57 / HMRC £1.57
Customer no change / Supplier extra £3.57 / HMRC loss £3.57
The only way the supplier can "share " the benefit is by reducing the VAT inclusive cost
e.g
Customer cost £29 / supplier £27.62 / HMRC £ £1.38
Customer saving £1 / supplier extra £2.62 / HMRC loss £3.62

Off course come Jan 2021 he will need to increase the price again.

 

[Deleted member 34243]

I think the VAT threshold is £85000 at the moment

 

[runnach]

The only way the supplier can "share " the benefit is by reducing the VAT inclusive cost
Vat inclusive Pricing
Old Rate Customer cost £30 / Supplier £25 / HMRC £5
New Rate Customer cost £30 / Suppler £28.57 / HMRC £1.57
Customer no change / Supplier extra £3.57 / HMRC loss £3.57
The only way the supplier can "share " the benefit is by reducing the VAT inclusive cost
e.g
Customer cost £29 / supplier £27.62 / HMRC £ £1.38
Customer saving £1 / supplier extra £2.62 / HMRC loss £3.62

Off course come Jan 2021 he will need to increase the price again.


merely illustrating there is margin to manipulate which I illustrated within my post,

Will suppliers though ? I guess if we believe the press many sites are running at high occupancy without needing to discount prices

A lot of people imo in fb groups seem to be missing the point the vat reduction for the remainder of the season gives sites increased competitiveness at price point by reducing tax burden , and stimulates consumer demand by folk getting more bang for the buck the win win I talk of

 

[colinm]

One of the campsites we occasionally visit is booked solid until September, after enduring over 3 months of zero income I very much doubt they will be reducing prices, and I don't blame them.

 

[jagmanx]

I think the VAT threshold is £85000 at the moment

It is indeed on Turnover

For campsites basesed on 180 days
That would be £470 income every day
Even at say £20 a day x 5 campers (£100 ???) As others have posted no Vat for Camc CL or C&cc CS

Fish & chip shops say £85000 divided by 250 days = £340 a day
So if each customer spends say £15 (2 meals) so 23 customers (average)
I suspect most F&C shops and the like will have a turnover many times in excess of the £85,000 given all their costs.
20% of my £15 spend is £3 and that is with zero VAT.
So a minor reduction to £14 could be in order but IMO no need ..KEEP them in business!!!
Similar argument even for PUB meals or Restaurant meals.
And those going to the Trendy or Posh places can afford to pay anyway !

I will quote this in my application for Mr Sunak's Job !

 

[Moped]

One of the campsites we occasionally visit is booked solid until September, after enduring over 3 months of zero income I very much doubt they will be reducing prices, and I don't blame them.

Campsites have had a business rate freeze and placed staff on furlough. They have actually done very well out of this as they have been receiving a compensation package based on average turnover for the period the business is open in normal times and as we all know they are normally quiet off peak. I know of several seasonal business owners who are very happy financially with the way things have been calculated.

They may argue that they now have increased costs whilst open but what genuinely is the extra cost of more intensive communal area cleaning practices relative to the amount of VAT that is being suggested they should keep?

And remember they do not need to open so if they choose to it is because they believe it will be profitable for them to do so even with additional cleaning and in the belief that VAT would have been at 20% which ultimately all goes to government (well the difference between inputs and outputs) anyway.

So please do not feel sorry for them and make sure you get you VAT refund which has been offered to benefit the consumer at the end of the day!

 

[colinm]

They have actually done very well out of this as they have been receiving a compensation package based on average turnover for the period the business is open in normal times and as we all know they are normally quiet off peak.

I was quite intrigued by this and have tried to look into it, but can find no evidence at all. There are several schemes which might compensate businesses and the owners and depending on size and circumstances some might be OK, but others, and one in particular that I know of, have lost a lot of money

 

[peecee]

This child chancellor is spending money like a sailor in Hamburg, after a a year at sea..
Or like there's no tomorrow...
Does he think there's no tomorrow ?
/
Does he [B know[/B] there's no tomorrow..??

I don't know if there is NO tomorrow ..for many people there will not be .live like today is your last is my motto , however, the child Chancellor , as you call him is an extremely gifted young man if you read his CV. I am no great lover of politicians of any hue I am firmly in the camp that believes that the only man who entered Parliament with honest intentions was Guy Fawkes .I do think however that this Government have done about as much as possible to support people financially through this crisis and are now trying to do the same for the economy ..yes ...the money has to be paid back at some point but you have to have an economy which is working so to do.. It's very easy to stand in the shadows decrying decisions which others have to make but my own feelings are that I am pleased that it is someone else that has to make those decisions ...

 

[Moped]

I was quite intrigued by this and have tried to look into it, but can find no evidence at all. There are several schemes which might compensate businesses and the owners and depending on size and circumstances some might be OK, but others, and one in particular that I know of, have lost a lot of money

The self employed can claim up to 80% of their average annual profit to a maximum of £2500 per month. This is in addition to putting employed staff on furlough and the business rate relief for 12 months. For seasonal businesses this has worked very well given that they are now open for the prime peak holiday season.

There is no compensation for lost profits if the company is limited which I guess most of the larger sites are. But how profitable are sites during the off peak period? Directors can furlough themselves however. And many of the larger sites with mobile home statics on site have still been receiving their site fees from the mobile home owners.

I have contacts in a Welsh holiday resort with mainly self employed seasonal businesses and they have never been better off because of the averaging process. As long as they have 3 years trading history they are OK. The only issue has been the time lag waiting for the compensation money. And now that they can open for the peak holiday season it’s whoopee time!

So make sure you claim your 12.5% site fee refund!

 

[alwaysared]

I think we're forgetting that VAT is a two way thing, ie. if your VAT registered you collect VAT and you then claim back any VAT you've paid on the running costs or cost of sales, so for example this month I take £3000.00 + VAT (£600) in campsite fees which means I have collected £600 in VAT but it's cost me £1500 + VAT (£300.00) so I've paid £300.00 VAT so when I do my VAT return I will deduct the VAT I've paid from the VAT I've collected - £600.00 minus £300.00 = £300.00, so I send this amount of to the VAT man. Next month I do exactly the same but now the VAT is only 5% which means I've collected £150.00 VAT but still paid out £300.00 VAT so when I do my VAT return, £150.00 minus £300.00 = - £150.00 so now the VAT man owes me £150.00.

The campsite owners who are saying they'll use the extra to pay for upgrades to the site are just using smoke and mirrors because if the next month I pay £5000.00 + VAT to upgrade my shower block I will have paid £1300.00 VAT and still only collected £150.00 VAT so now I deduct £1300.00 from £150.00 = - £1150.00 so in effect the shower block work has cost me £3850.00!

So if I were a campsite owner I would keep my prices the same, add 5% VAT instead of 20% VAT which would make me look honest and trustworthy. Meanwhile I'd be off to the bank to get a fixed low rate loan and get my shower block upgraded

Regards,
Del

 

[colinm]

The self employed can claim up to 80% of their average annual profit to a maximum of £2500 per month. This is in addition to putting employed staff on furlough and the business rate relief for 12 months. For seasonal businesses this has worked very well given that they are now open for the prime peak holiday season.

There is no compensation for lost profits if the company is limited which I guess most of the larger sites are. But how profitable are sites during the off peak period? Directors can furlough themselves however. And many of the larger sites with mobile home statics on site have still been receiving their site fees from the mobile home owners.

I have contacts in a Welsh holiday resort with mainly self employed seasonal businesses and they have never been better off because of the averaging process. As long as they have 3 years trading history they are OK. The only issue has been the time lag waiting for the compensation money. And now that they can open for the peak holiday season it’s whoopee time!

So make sure you claim your 12.5% site fee refund!

That's what I thought, there is no compensation scheme to cover 80% of turnover.
For some sites the compensation might well cover them with little differance, but I know one holiday site business that has lost more money than I've earnt in my lifetime! mind you they coin it in most of the time, so I'll shed no tears as long as they pay my bills.

 

[antiquesam]

Campsite owners seem to follow the same path as farmers. No matter what happens it's bad for them.

 

[alwaysared]

Campsite owners seem to follow the same path as farmers. No matter what happens it's bad for them.

Farmer's are in an even better position because most of the stuff they sell is zero rated VAT so they claim it back but never collect any.

Regards,
Del

 

[Nabsim]

If they are anything like around here they are cash only, not that that would have any bearing of course. Talking to a the self employed I know they all got upset that the Government paid them a percentage of the declared earnings, which wasn't anywhere near enough to cover their living expenses. Just saying!

There are quite a lot who have lost out by not declaring earnings properly. That’s the risk you take