A reduction in the VAT rate from 17.5% to 15% to support the economy and increase consumer spending from next week, introduced today the Chancellor in the pre-budget report. This will cause big problems for e commerce websites, because the 17.5% VAT haven't been changed since before e commerce was devised.
Some systems most probably have VAT hard coded into the e commerce systems, but even advanced programs will still need to be accommodated to reflect the decrease of the VAT. A number of retail dealers who haven't a retained website development company will have the misery to have the VAT rate hard-coded into their CMS. This makes price changes before next Monday almost impossible. Retailers will have to carry out extra work on their e-commerce sites if they want their businesses not to be affected by this change in the VAT rate.
Because of the VAT rate change updating banner adverts, which have prices included, will be another major problem for the e commerce websites. Most small companies don’t update banners on a regular basis or they haven't been amended for years and the new VAT rate will compel e commerce businesses to change the majority of their banners. This will make them uncompetitive from next Monday but fixing them in a great number of sizes and re-uploading them to ad-servers across the web isn’t a rapid task.
Also businesses that have already locked down their e-commerce systems in preparation for the Christmas shopping period may see more problems than others in changing their website prices following the VAT change, according to the software firm Coda.
Go Live UK has over 10 years experience in offering it's clients the highest level of IT products and services. We specialise in providing high end solutions ranging from from Web design and services, Graphics Design and E-commerce to business development software and guarantee a high standard of service, maintenance and after sales care.
With the new VAT decrease taking effect from 1st December, we can assist you in the changes required for your business software.