A frugal life is an easy life!

FACT - The world of retail loves nothing more than confusion for it's customer base.

The more clouded an issue for customers the more money it can edge out of our pockets without the customers realising!
With the impending return of VAT, from 15% to 17.5% - confusion is abound and people are being mislead!
I would dispute that the reduction in VAT to 15% in December 2008, actually happened at all.
Companies have been claiming all year, that importing costs against a weak pound forced prices upwards, they also imported products at 17.5% VAT (as this wasn't included in the tax office reduction).
As one commentor on a news website asked: "Did anyone witness newspapers reducing in price by 2p or a bar of chocolate?" - I witnessed prices going up instead of down.
In the confusion created by the reduction, I have no doubts at all that overall prices of everyday things increased, whilst many were advertising "VAT reduced prices!"

Exactly the same thing has already happened for all of us, as prices have increased in the two months up to Christmas - it gets worse for the UK consumer, as now we are witnessing major high street retailers saying one thing and doing another!
Before we go any further, let me give you an example about how easy it is for our imaginary store to mislead you: If I had a pencil on the till of our shop, that has been priced at £1.00 for 28 days and I reduce this to say 20p, I can now legally advertise in my shop window an "Up to 80% off sale instore now!"

TESCO:
At the beginning of December 2009, in an interview with the retail magazines, one of their finance people would not speculate or give any information regarding how the company would change its prices as regards the VAT increase due on January 1st 2010.
By late December 2009 this had changed to them claiming that they were helping their customers by having a "£12 million VAT freeze on thousands of products!"

As always, the devil is in the detail - the VAT freeze will not cover all products, the VAT freeze will not be happening in all of their stores.
The most alarming (and disappointing) thing for me, is once again finding that big business on the high street is treating customers with scant regard - by increasing prices prior to an advertising claims of helping customers.

Industry data, seen by a competitor to Tesco and leaked to the media, reveals that businesses have been increasing prices prior to Christmas and in the run up to the VAT return to 17.5%
"Tesco claimed yesterday to be freezing the price of Fairy non-biological at £4.50 as part of a “£12 million VAT freeze” on thousands of products. However the data shows that the non-biological washing powder was selling for £4 in October" (Source Daily Telegraph)

Tesco increased 500 prices, earlier in December, in bedding, cooking equipment, crockery and other items that are subject to VAT by similar amounts to the increases due on January 1st 2010.
It is not only Tesco that have been doing this.
The data also shows that Boots increased the prices of over 1,500 product lines by an average of 2 per cent in the last 12 weeks. Morrisons, the supermarket, increased the prices of 400 products earlier this month by an average of 2 per cent, raising the price of pet food, health and beauty items and cleaning products.

Sadly, it would appear that official bodies are once again, doing little or nothing, to protect the individual, who, as we are seeing more and more, are being bombarded with half truths and mislead by not being told the full facts.
Confusion means increased profits for businesses.
Be careful out there gang....