Q. I run a small record shop and I'm not sure how to deal with requests for refunds and exchanges when VAT goes back up to 17.5% in the New Year?
A. With effect from 1 st January 2010 retailers must alter their tills and VAT accounting processes so that they account for and claim VAT at 17.5% and re-price their goods accordingly (if they intend to pass the VAT increase on to customers that is).
Requests for refunds and exchanges peak over the xmas holidays and you do need to know how to deal with them. An example may assist. Say I bought a Cliff Richard CD from you for £6 for my wife on xmas eve (well, she is good value for it all things considered). Assume also that, unfortunately, it was not what she was hoping for and therefore I request a refund in the New Year. Assuming that you give refunds, you would need to provide me with a credit note reflecting the 78p VAT charged at 15% on xmas eve.
However, if I wished to exchange the CD for another item, then different rules apply depending upon whether the replacement item cost more or less than the original CD. The different permeations are too complex for this column and so I have prepared a guidance note of what to do in the various different scenarios which I will email to you. Should any readers wish to obtain a copy then please contact Keith Swan by email at ks@pgslaw.co.uk or by telephone on 0808 231 7043.
Patterson, Glenton & Stracey Solicitors have provided legal advice to the people of South Tyneside for over 125 years. For details of their full range of services and to view previous Gazette articles please log on to www.pgslaw.co.uk. Be Guided by the Experts.
