Vat cut - a boost that must be passed on.

By Steve Orme on Nov 26, 08 12:12 PM

Brentwood , noon, November 26: "Ford Motor Company Limited confirms that the full benefit of the 2.5 per cent reduction in VAT announced in the Chancellor's pre-Budget statement yesterday, will be passed on to its passenger car customers.
Furthermore Ford will action the savings at all its UK dealerships nationwide with immediate effect on car orders, provided payment and legal transfer takes place on or after the December 1 official start date."

I should hope so. The last time I looked this was a tax cut, as in the seller pays less VAT to the revenue because the buyer paid less tax to him. To pass on only, say, 1% of the cut is to set up another intermediate private tax. A car dealer friend of mine calls opportunities like this 'Eddie added tax, 'referring to the potential for enhanced margins if a punter looks a bit green around the mug. Or daft as we rural folk call it.
It is worrying that Ford should even feel the need to issue this statement.
Yes the cut was a pathetic attempt to stimulate growth but through increased sales, not a free gift to vendors.
And while we are on the subject, how strange that when the cut was announced it was damned as making no difference to the man on the Clapham Omnibus. But when a 1% increase was leaked it was as though the world had been hit by an asteroid.
Make your mind up, Dave.