I have to say that I’m not one to normally comment on such matters but this really does beggar belief! In fact, apart from one post on using multiple monitors (which people really should do!) – I don’t post on non-recruitment 2.0-related topics at all. However...
VAT has been changed from 17.5% to 15% - yes, on the face of it you can multiply the sales figures of retailers up and down the land, the treasury will tell you that this ‘could’ generate £xx billion for the economy – Great! But how much is it going to cost to implement? Never mind as to whether we’re going to see an item in a shop for £9.99 being changed to £9.78... Can you really see shops relabeling their products? (apart from Asda)
Also, one of the biggest cost changes in recent times that affect families (who are the ones the government is supposed to be helping here) is our weekly food bill. Did you know that VAT isn’t applied to food? So it’s not going to make any difference there at all!
I have to say that I was thinking about buying a new TV, we don’t watch too much TV in our house, so just a simple 32” LCD will do the trick. The current price at Dixons/Currys/etc is £399.99 – so on Monday this will be £389 – or will it? Do we expect Dixons to have got around to changing EVERY PRICE IN THEIR STOCK INVENTORY to take advantage of the VAT drop? We’ll see!
What about businesses – how will it affect them? Well every finance department across the land is going to have to change their VAT rate from 17.5% to 15% - is this just changing a field in a ‘system’ – maybe – I’m not sure! The fact is it’s a change that will take time, time to do, time to test and time to understand the ramifications. Never mind changing cash flow projections...!
Also, will it positively help business cash flow (another desired outcome for these tax changes) – answer: NO. If a company bills a £1M pounds in a quarter, VAT is added to it at 17.5% - that’s £175,000 of positive cash flow. Yes, we’ve got to give it back when the VAT quarter comes around, but for a period that’s cash flow. By reducing VAT to 15% the government has effectively reduced business cash flow – how can that be a good thing?
And yes, I do understand that it’s part of a package of tax changes to help stimulate the economy – but does anybody really think this will do anything other than cause people grief and cost people money to implement?
Er... rant over (deep breath taken)
- Mike
There is no doubt that the Internet has fundamentally changed recruiting. Since job boards appeared on the scene in the 90s, savvy HR recruiters were quick to find ways to take advantage of this new, low cost way to reach the large, growing market of Internet users.