In yesterdays budget statement what we already knew was confirmed: from 1st April cycle helmets will no longer attract VAT. This was revealed in November, but what are the implications?

From April, helmets should cost 17.5% less

Back in November, Richard Peploe of Madision said the VAT concession for cycle helmets would be a good thing. Now that the details have been rubber stamped, Peploe believes IBDs should be actively trumpeting the forthcoming.

[IBDs should} start thinking about ways to capitalise on this opportunity. If the public know they can save pounds on a helmet, not only will they buy more but perhaps we can persuade them to buy another accessory with the saving.

In a mailing to dealers, Peploe maps out the timescale for the dropping of the VAT amount on helmet sales.

Madisonsrecently published price list and catalogue shows all adult helmet retail prices without VAT. However, until April 1st IBDs should add 17.5% VAT onto this to arrive at a selling price.

IBDs will continue to be charged VAT on any adult helmets bought up to the end of March.

From April 1st IBDs need to process adult helmet sales in the same way they currently sell youth and childrens helmets, whoich are already zero rated.

Peploe says: Non-VAT sales are about to become a much more significant part of your business. It is important that all shop staff follow the correct procedures on the shop floor, otherwise you will be losing profit. Ensure your till separates non-VAT sales. By accounting for all purchases and sales correctly within the VAT system, you will have no loss of profits, regardless of when the helmets are bought or sold.

Let us use this as an opportunity to sell more helmets: make sure your customers know about the better deal soon to be available to them.

NB On a seperate note but sticking with VAT the trade organisation ETRA, of which the ACT is a member, has revealed that a trial reduction of VAT on bicycle sales and servicing has increased the level of sales of bikes and service take-up. Three countries Holland, Belgium and Luxembourg carried out the experiment and, according to ETRA, in Holland the incentive already appears to work. People do bring in their bicycles more regularly for checkups and repairs. As a result, they ride better-maintained, thus safer bikes and the work increase for retailers may well result in job creation.

ETRA will now lobby the European Commission to turn the experiment into a definitive measure. The European Commission is currently reviewing the sixth Directive on the common system of VAT including Annex H listing all products and services to which the reduced rate with a minimum of 5% can be applied. ETRA will aim at adding bicycles to Annex H.

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