Monday, November 24, 2008

How much will the VAT change cost businesses?

Now that the VAT change has been announced we have started a project to implement it. We have our own IT team so the cost is an opportunity cost, which is high in our case because we have some key projects being delayed. I reckon about 10 man weeks of work in total just to change our billing system and bills.

Companies that outsource billing and accounting may have to pay for the changes, depending on their contract terms.

Will big out sourcing companies like EDS have the bandwidth to make all the changes?

As we bill in advance we have to rebate for the period. That is 50p per direct debit customer as well as the time to do the work.

Then there is the cost of calls to out call centre as customers query bills they don't understand.

And what about HMRC systems? I presume they will need to make changes to their notoriously crap processes and software, more cost to us, the tax payer.

This isn't going to be a cheap exercise.

And then we've got to do it all again in reverse next year.

I suppose it does increase economic activity, but not in the way predicted.

1 comment:

Mrs Smallprint said...

The politicos have no concept of how much their tinkering is actually going to cost businesses. I think any effect on consumers will be negligable and will be nothing at all on the "hard pressed families" they are always spouting off about.