2" Burrell Driving Wagon - VAT

Hi All,

Today a customer has called and cancelled his order for a 2" Driving Wagon due to the increase in the VAT level. We therefore felt it was important to cover this on the forum as best as we could.

A letter was sent out to customers in September offering a 2" Driving Wagon at the price of £295 deposit and £295 for each of the three kits. Total £1180. Additional to this ex Modelworks customers also recieved a discount of £250 reducing the total price to £930 due to previous kit restructuring. In the letter it stated that the price was inclusive of VAT at the current rate.

At the time of writing the VAT rate was 15%. We also explained that we were hoping to despatch the first kit in January 2010. We were well aware that the VAT rate was due to change again in January, what we were not aware of is how much, for certain, it would be changing by. We'd been told anything from going back to 17.5% to up to 20% to staying the same for a little while longer until the country lifted itself out of the recession. That was the reason for putting 'VAT at current rate'.

As a business we receive no more. The Net amount we receive on a Traction Wagon at £930 is £808.86 or £1026.09 on one at full list price of £1180.

When we price our products to work out whether we are making a profit we have to do them on the Net value because anything that is added does not belong to us, it belongs to the Goverment. Legally, as the majority of our customers are members of the General Public, we can not advertise the Net figure and must advertise at a price including VAT at that time.

Unfortunatly there is nothing we can do about this. If as a business we take the 'hit' then we are just reducing our margin by 2.5% from an already competetive rate, especially at the £808.86 figure. When the VAT was originally reduced to 15%, everybody who was paying 17.5% recieved that reduction and benefited. We could do that because our Net amount remained the same.

It was never our intention to mislead customers and we apologise should any one feel that this has been the case. If we seriously wanted to make an extra £6 per kit we would have simply added it to the kit price at the time.

All the best

Dean & Steve

Dean
As a dumb blond ( well when it's not covered in soot) I can't believe that someone has been so petty as to argue over a total of less than £24 quid. Surely that customer must have accepted the last few months kits with the VAT at 15%. I wonder if he also got the discount which you and Steve so kindly offered us as being an ex ModelWorks customer. Will he now moan about the last few kits at 17.5% ? or is he/she expecting to get them at the old rate.
This type of attitude annoys me as its the Government who gets the extra cash. After all you are only unpaid Tax Collecters for H.M. Customs & Revenue Steam Girl

HI

As for me I am now all sorted and the money is on the way For my kit

Thankyou

I think thats a good price for the driving wagon..

I would order one but my dad has allready started making me one at the railway he works at..

I paid over £1000 for a 5inch driving cart for my loco's so I'd say it was a good deal this..

Jo