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A couple buying music from a stall

GST – on the price tag or at the till?

By Claire Peters

When GST is finally introduced in Jersey, do you want to have the tax included on the shelf price, or do you want it kept seperate and added on to your total at the till?

Four years since the idea of GST was first discussed and ministers have now definitely agreed to introduce the Goods and Services Tax law in April 2008.

However there are a number of issues that still need to be decided upon, plus there is concern over how banks will be effected by the tax.

Buying Sausages

One of the details still to be confirmed is whether GST will be included inclusively or exclusively. Whether GST should be incorporated in the amount on the item’s price tag or should it be added on at the till?

A report by a GST scrutiny sub-panel submitted to the States recommends that in the early stages of the introduction that market forces should be allowed to determine whether or not prices will be marked inclusively.

Deputy Patrick Ryan, who chaired the review group, told BBC Jersey that the panel believes that the greatest area of concern for consumer groups “is this question of the rounding up of small value items.

Shopping in St Helier

“People are worried that shop keepers are going to effectively add more than the 3% GST to the price of goods if the prices are shown inclusive on the shelf”.

What you see is what you get

However, the panel found “lots of other evidence” to indicate “that over time consumers prefer to see inclusive pricing, because basically what you see is what you pay”.

The panel’s report suggests that rather than making a definite decision on behalf of both the retailer and consumer that the States should “let the market decide”.

“If people in the earlier stages prefer one way then they’ll tell their shop keeper in no uncertain terms,” said Deputy Ryan.

Pound Coins

Confusing?

If retailers are left to make their own minds up you could find yourself buying a bottle of water in one shop that’s had GST is included in the shelf price, then you’ll go to the shop next door to pick up a sandwich and find that GST is added on at the till; a scenario that islanders and tourists alike could find confusing and irritating.

Deputy Ryan thinks that “consumers pretty much are able to work out which shops are inclusive and which shops are exclusive”.

He said, “if you have food shops as a collectively as a group, I think they will amongst themselves decide which way they want to go. And it will be the way that their consumers will want them to go.”

Have your say

What do you think? Would you rather see GST included in the shelf price of the item, or added on at the till?

last updated: 05/05/08

Have Your Say

mai
Id like to know exactly what it is were paying for.Our food produce is totally shoddy and within 3 days of purchase the fruit and veg are going mouldy,and they sell the same stock right up until the sell by date then reduce price on the last day, i have bought meat, fish and "fresh" doughnuts from checkers, to name a few things, 2 days within the sell by date and it absolutely stunk and was inedible, and the doughnuts which supposedly had another 3 days shelf life were rock hard, so what exactly are we paying this tax for? perhaps its the miserable till service where they seem to think they are doing you the favour by taking your money, and shop managers who clearly cant keep their shelves stocked its like shopping in russia in the co-op most days. We already have extremely overpriced goods,its astounding that we have to pay a tax on top, when we are already paying well over the odds for our produce, the prices in checkers are exorbatant. Its an absolute disgrace and they get away with it because they know they have little competition and we have no where else to shop.

Terence Kent
From a tourist's point of view there has to be a set method of pricing. It is unreasonable to expect the customer to have to ask if the price is inclusive or exclusive.

For instance when I visit Jersey every year I like to stock up on cosmetics etc, if I see an item for £50 in one shop but only £48 next door I then have to find out which one will be the cheapest by asking members of staff whether the price includes the tax or not! Surely this is not the way customers want to buy.

I reluctantly accept that GST is going to happen but you need to be consistent and have a standard method across the board.

Can the sales tax that traders have to pay themselves on their purchases be offset against the sales tax they collect and pay the States the difference?

If not, it is obvious the customer will end up paying more than the quoted 3%.

Jaydie, aged 15
What use is it if the GST is not included on the shelf price? It is not going to be the amount that you have to pay for the item.

So, if you want to buy something and only have £10 and the item is £9.80 then you will think that you can afford it, but actually it is £12.74.

Then you will look like a complete idiot at the till because you have to but it back. If it is added on the shelf then it is clearer and then you can decide if it is too expensive.

Personally i think that GST is pointless as everything is going to be more expensive and as it is already hard for young people in Jersey to get a saturday job, because of immigration, it is hard for us to be able to buy things we want on our low weekly pocket money and not everyone gets pocket money.

Things is Jersey are already more expensive than England and now it'll be even worse!

The big bloke down below.
Why oh why is le suer or whatever he,s called in the states??? He is a silly little old man thats obssesed with money.G.S.T GREEDY SODS TAX!!!!

Bobby Grant - Scotland
Seems like your Island ministers are determined to make Jersey into an exclusive place where only the mega rich can live and visit. It's terrible that people born and bred on the island can't afford to buy a residence and are forced to move away. Meanwhile, rich outsiders seem to have no problems becoming residents of Jersey.

This GST is only punishing the less well off on the island and as a previous visitor who loves Jersey, I would now have doubts about whether I would return as a tourist. The ministers should look at the bigger picture. All I think that is required, is tightening of the purse strings.

This has been carried successfully out by government departments in the UK over the last few years.

The bloke on the big island
Well Nina you better be well off if that Le Suere bloke thinks people in Jersey should move to England to buy property as hardly any us can afford to get on the property ladder here. May I suggest your Terry tells you to buy in Normandy or New Zealand instead! I reckon he is Gordon Brown's best mate.

Richard
'At the till' would be the most elegant method.

nina travers
again the states will be taking money away from the poor in jersey, Terry le suere suggested that jersey people should move to england if they wish to buy houses but what he realy meant was he does not want any poor local people in jersey at all. you can only stay if you can offord to buy your own house. he sold the peoples land, he put GST on food prices and he put house prices up to push the jersey poor and working class out of the island.Jersey is becoming an island for only the rich and it does not matter if you are born here or not ,if your not rich your not welcome.

The bloke on that big island above you
Well you have to appreciate that house prices in the UK are ridiculous as well and have become unaffordable. You also have to understand that we taxed for virtually anything we do and just like in Jersey the really rich get away with it by having favourable tax rates (note the huge rise in millionaires moving to London). We also get taxed for a millions things you don't as Gordon Brown has put stealth taxes on so many things. Stop moaning, the cheaper food and petrol prices we have are off set by a million other taxes we have to fork out (how much of your monthly wage goes on tax for example?) for which you don't suffer.

Steve
GST should be added on the shelf price it is the only sensible way ! and for the guy from the big island Jersey may have lower taxes etc but cost of living is so much higher, it isn't just rich people over here !

Terry
Once again our Government has successful used spin to draw everybody’s attention away from the real issue.

It’s not the 3% tax or the insignificant roundings. The real cost will be the additional manpower involved in administering the tax.

You can bet that like IT IS our civil servants won’t make life easy. Additional staff will needed to fill in the forms, additional accounting and audit costs, non registered companies will have to send staff down to customs to pay the 50p tax before they can receive their goods – notice that the only parking is reserved for civil servants.

Naturally we will need loads more civil servants to process all the different coloured forms that will be invented, stop locals returning from holiday to check what we have bought, intercept our post checking for Christmas presents etc.

This will cost millions which will eventually result in even more tax. Of course the inevitable price hikes to cover these costs (forget the actual tax) will hit our economy, especially tourism so even less tax.

Faced with this potential disaster our GST will soon hit 17.5 % just like VAT and we will still be no better off.

Why don’t we just sign up for VAT and become part of the EU VAT zone – a cynical answer may be because there are no highly paid civil service posts to be gained.

Mickeymay
My cous came over from Jersey a while back for my dad's funereal, but he also needed school clothes for his kids. 3 boys shirts for a fiver at Tesco's, need I say more...?

The small bloke below...
what bloke on the big island does not appreciate is that our house prices are far in extreme to the majority in the UK. Every body regardless of income needs somewhere to live. Necessities such as milk and bread are in excess to what you pay and fuels are already similar prices to the Uk regardless of tax or not. The rich people over here do not have much of a problem with extra taxes on goods but as usual the less well off will suffer. Tax income not goods, its fairer!

Peter
The bloke on that big island above you is quite right we have been living with VAT for about 30 years but have never paid it on food and childrens clothes.And it as gone up a number of times

Troy McClure
I've always said that the price should be marked on a per item basis as opposed to the 3% being added to the total.

Many people are calling for the 3% to be added to the total because they believe it will mean they only be rounded up once and that this will see them paying less. The Chamber of Commerce are also calling for this system.

Unfortunately I'm yet to be shown any evidence that either way will be cheaper than the other, and my gut tells me that adding on the item will be the better option for the CONSUMER.

I've been adding 3% to my last few shopping baskets and I'm yet to pay an extra 1p by rounding on item over at till.

Add 3% to the items in your basket, how may item were priced at 99p, £1.99 etc. etc.? The reason for this is that the retailer sets his prices at the level HE thinks the customer will bare, and it's been proven that 99p is more acceptable to the customer than £1. This is called price pointing.

Once GST comes in the retailer will still want to hit these fixed price points so a 96p item will be rounded up to 99p just as it is now with or without 3% being added on the item. THe retailer would prefer to advertise his goods at the (rounded) price point and then add 3%, meaning the consumer gets hit with the full 3% tax and he still makes his full profit.

Taxing the total will cost the consumer more. Having said all that I still think it's a shame that the tax is needed at all, but I do think it's a fair tax.

One last comment, the dropping of legislation on pricing format will now lead to chaos with different retailers adding it in different ways.

The bloke on that big island above you
Oh boo hoo hoo, you have to pay a small bit of tax on goods. Welcome to the real world Jersey, I've been living with VAT for ages!

The Mission Man
Let's face it - the likes of Senators Ozouf and Le Sueur don't have a clue. Worse, like many, I believe they have little care or interest in the problems their short-sighted policies have on both the less well off and middle earners generally. The full range of alternatives clearly have not been fully explored - the question must be: why not? I really think it is time to bring in IQ tests for Ministers. This island so badly needs a clear thinking, modern and moderate government in place before we pass the point of no return. All the more reason, come the next election, to get out and vote for the Jersey Democratic Alliance. Common sense politics with a social conscience!!!

Paul - St Helier
On the tagBUT - we encourage ALL schemes to promote competition - this will mean that retailers drop their base price before GST is added, and we, the buyers, will then pay the lowest prices.

John
Carl - us paying 3.4% to the retailer because of rounding doesn't mean the States will get 3.4% it doesn't work that way.

What will happen is that once a year the shops will pay 3% of their turnover in tax to the States of Jersey and then any difference in the rounding will be added to their profit.

jimevans
at the till, then the states only get 3%, NOT 3% + 3% of ANY roundup.

Phil
At the till, but only allow rounding down! NO ROUNDING UP AT ALL.

Carl
Just a few examples:

10p item - 10.3p rounded up to 11p - actual increase 10%
20p item - 20.6p rounded up to 21p - actual increase 5%
50p item - 51.5p rounded up to 52p - actual increase 4%
99p item - 101.97p rounded up to 102p - actual increase 3.03%
150p item - 154.5p rounded to 155 - actual increase 3.33%

As you can see, the actual percentages by which each item rises are far more than 3% at lower price levels, but can still be significantly higher even at the £1.50 level.

However, we're all in the same boat, and if we end up paying 3.4% on average on a supermarket trip it means that the States are earning more from all of us, and in theory that means any future increase from the original 3% should not be needed so soon (although in the real world they'll just spend whatever they get anyway and still end up with a shortfall requiring a rate hike).

Johnny
I wish people would stop saying shops add VAT on in Jersey - THEY DON'T - they might be the same price as in the UK but none of that is because they've ADDED VAT on to the price for Jersey - it's because they've left the price the same and pocketed the different (that would have had to be paid to Customs or whoever).

crp47
Add it at the till like they do elsewhere, USA for example. That is of course if we have to have it in the first place. Perhaps once in, M&S will stop charging VAT.

Si
Personally I'd prefer it to be on the shelf but with a conditition - that the full amount paid in GST is shown on the till at the end.Then you can check to make sure that the amount you've paid in tax is only 3% of your total spend.You don't have to have it added at the end to see how much tax you've paid - shops have pretty good computerised tills now - they can show how much you've spent.

tim
I doesn't matter which you prefer , if the tax is rounded up on each item your shopping will cost you much more than if it was added on at the till and rounded up once.

I'm pretty sure everybody begrudges paying the 3% without paying more than 3%!

It's just another way of trying to fool the public into paying more and making it easier to put the 3% up in the future.

It might be easier for people to see how much they are spending as they go around the shop but then you don't notice so much when they raise it above 3% which they will do as they are going to waste more taxpayers money.

Paul M
The GST should be added at the till. Mr Le Sueur just does not listen. He can't do otherwise with Chamber of Commerce, callers on the radio and the general public who pay his £40,000 job want the tax on the till not on the product. What a muppet! As for the Catholic schools getting no GST because they are a 'charity' is pathetic. If you can afford £1200 a term, you can afford the extra £36 the 3% tax will cost.

Cardin
If GST is to be imposed, it must be at the till, in order that the inevitable tax rises are distinguishable from retail price rises.

rosie travers
we pay tax on cigs, petrol and drink, where will the g.s.t be added. on the whole amount, or on the actual price before tax.nice little earner aye? as iv,e said before, an annagram of connex [ how much is that costing us] is nex con

Brian from St Clement
The island is hedding for more trouble if it imposes more tax on the people of Jersey, especially if we have surplus funds at the moment (much to the surprise of the Teasury minister) what is he doing and who is advising him ??

GST is yet another nail in the cofin for local poor people. Even if they get handouts from the governmentto try to "help" them, many are too proud to ask. And when the forms required to be filled out by them to get state benefit asking them to bare their souls in the name of avoiding fraud. Why can't this be done by interview when the truth will come out.

There is no need to penalise all the people by burdening them with "heavy" paper-work. Some forms put of by one Department are atleast 15 pages long!!

Far better to trust the people a little more and weed out the fraudsters if any when the need arises.

This over empathesis on MONEY is really damaging the island and it's people.

That's it for now, but please wake up to what goverment is doing to the island and the resentment of the people to yet more taxes when they are not really necessay at the moment!!!!!!

Look at the fiasco of VRD and the effect it had on local small businesses (even charities).

Thank you who ever it is that allows us Jersey Beans to get our message across, but I would say that it's not all that easy with such a small area to work on 'on line'.

Emilié
This island is supposidly VAT free anyway... however, we are already paying much more for many items than you would in the UK. By adding this 3% we will be easily paying up to 20% tax... if not more. Ok shipping costs add to prices, but not this much!

maurice pierre
No QuestionAt the till please ?

joan
IF WE HAVE TO HAVE THIS TAX (AND I THINK TIGHTENING UP THE STATES SLOPPY SPENDING WOULD BE A BETTER IDEA) GST SHOULD BE ADDED AT THE TILL. IT WOULD BE LESS EXPENSIVE FOR SHOPS TO IMPLEMENT AND CONSUMERS WOULD HAVE ONLY ONE ADDITION TO WORRY ABOUT. IT WOULD MEAN A LEVEL PLAYING FIELD NOT SOME SHOPS ROUNDING UP PRICES.

Jay
I dont agree with GST but wouldnt be so against it if we weren't already paying VAT in most clothes/book shops already and paying silly prices for food. This means we will be paying the 17.5% already on some goods plus 3% GST (we all know that it isnt going to be 3% for long if at all).

Brian
On way of avoiding GST would be to make Social Security contributions for all employees & employers relate to the same percentage of earnings without a cut-off at the higher levels.This would bring in more money for the States and at the same time shift the burden of paying the most from middle-earners to fair payments, pro rata, across the board, ie.,remove the ceiling on contributions.

Brian Le Fondré
I think GST should be added at the till for obvious reasons, if at all. If the States sell of Jersey Telecom and receive about £200m., plus selling off some of the States' owned properties as well,the income should delay the introduction of GST for a few years at least.The VRD was a disaster when introduced, and our local Riding for the Disabled Charity had to pay £3,000 VRD on a secondhand horsebox valued at just £9,000.It's a shame that we have to introduce GST as in the past the Island was renowned for it's low tax status.By introducing this additional tax both tourism and the local population will be adversely affected. Even millionaires like a bargain!!

Yay Gee!
RE: Chris Pettit's comment, since our Beaureau Des Impots has ceased to exist (the Oldest in the British Isles) (It was, before some clown decided to rationalise theirsevles a Grade higher!)We have only, now, the anti-druggies and the `Friends of Terry'Count me out. If they (our benighted Masters) go ahead with this insane plan, we will shut down and lay off all our staff.

Ross
I think I might have the best idea ! Don't add the tax at all !! It is an unfair tax where the islanders are having to cover States mistakes. We already pay way to much for most of our daily items. Bread and Milk are just 2 items we nearly all use but are ridiculously overpriced. We are supposed to have this booming Financial economy !!!

John Smith
The problem here is most UK based food items are VAT free and the price is part of the packaging.With GST on each item all prices will have to be changed at much expense to the consumer.Just think, all UK newspapers will have to have sticky labels covering the price as under Jersey law it would be illegal to shown a non-gst based price.

Jim B
A while back on Channel TV I was watching Terry Le Sueur's little face and listening to that beautiful voice of his, then suddenly he said something that made me think 'I've been given the task of raising/stealing/fudgeing (can't quite remember exact phrase but along those lines) approximately £40m for (place silly reason here...) and GST is the most viable option of doing this' - ok, not quite word for word but I couldn't help thinking about this 'rainy day fund' we have and it's supposed £500m+ balance - can anyone tell me what's happened to this money and why aren't we using it to cover the obvious shortfalls there must be somewhere for GST to be introduced??I say shortfalls because I still don't understand the need for GST, other than a maverick invention of a new tax in a 'tax haven' Island, I just don't know. Why not introduce it on a staged basis with any shortfalls coming from this ghost-fund? And in answer to the question, on the till, all day long - that is IF we have a choice - will these points being raised even get read by anyone with any influence? My guess is no, and we're all just moaning to ourselves. It's so depressing, you wonder why more and more people choose a life elsewhere...

Tasha
I think the GST is ridiculous because the States want more money again to spend on what? to give more money to the people who are living off benefits what about us pepole who pay our taxes and dont get benefits we are being robbed by the States again we work hard and pay tax so why shoud we pay GST, this is definately going to bring the tourism down and alot of people are going to be out of business and their profits will be with out a doubt down as i know i wont be shopping here with GST on it is much cheaper in St Malo and London for any shopping and putting GST on is going to make it too expensive and we wont have many tourists as they think its too expensive already, and they are right!

Chris Pettit
For the tourist then does it mean if they spend over 50 pounds in one tranaction, they get the GST back, like you do in Canada. The tourist then has their receipt stamped at the airport and form authourised

Spooky
We have been turned over by the States once again ! Almost everyone I know would hvae preffered GST at the till.

However - now that our Soviet (sorry States) have put it at item level, this gives them the oppotunity to tinker with the tax at their whim i.e in the UK a packet of digestive biscuits does not attract VAT but chocolate biscuits do because they are classed as a luxury item.

You can see where this is going - by having the GST at item level next itme the Soviet (sorry States) is short of a few pounds the GST rate will rise on a particular class of product, could be wines and spirits - tobacco - cars or whatever they want.

Also to be considered (apart from the rounding up which has to happen, for example 3% of 20p is 0.6p). Think of all the products in your supermarket or even small retailer which have the price embeded in the bar code.

These will all have to be relabled - and who, at the end of the day is going to pay for that !And they wonder why people cant be bothered to vote ?

Emilie
What I don't understand is how all the states members are 'picked' to represent the publicss views and ideas, however, I haven't met anyone who agrees with the GST!?!

Mr. Winton
It's about time we scraped cash altogether. I'm in the process of designing a new basket / trolley that adds up the value of all your items as you go along and put them in your basket / trolley. The 3% can be incorporated into the reading.The trial run has been sent out to Kwik Save Stores Ltd in Hindley Green, Wigan. However the concept of 19p for a loaf Betabake and 30p a pint of cavendale milk means that the possiblily of the reading going over £10.00 is still yet to be achieved in a single trolley!Find out more on www.mrwintonis completelymad.je xXx

Alex
Inclusive prices, what you see is what you get. When shopping in America it's a constant irritant not knowing how much things actually are.

Ernie
I think GST should be added at the till, i.e.at the bottom of your normal till receipt. I believe this would be much easier to understand, it works well in some other countries.

David Allo
GST should be added to the total bill this would ensure that prices are not rounded up

mr s message
It seems like we are going to be paying even more for goods which are much more expensive than in england or france no matter whether the tax is included in the price or added after. If we are serious about attracting visitors to the island then value for money is a key consideration there comes a point when the attractions of this island though many, will be outweighed by the lack of value. lets face it france is much better value for money and the drink is half the price!

Col
At the till, we ripped off enough already in stores compared to UK

Phil
just make rounding up against the law on all items under £1.00, but it's best to have inclusive prices, or give any rounding up to Jersey charities, by law!

Dibby
Yes but if it works perfectly well elsewhere it'll no doubt not be the way that is used here!

J B
Adding it on at the till works perfectly well in Canada and the US and then you would pay as close to 3% as possible with no rounding up of every item in your basket.

Kelly
Yes but maybe if the amounts that the shop will make in rounding up add to profits it will mean they don't put the prices of their goods up for a while...actually probably wishful thinking!

Charlie
Just to give one example alone most days I spend exactly £3.50 on my lunch. If the GST is added on at the till I'll end up paying the shop 1p per day more than I should thanks to rounding up (the shop will keep it). If it's added on inclusively to the price I'll end the shop ends up making 3p extra from me thanks to rounding up on each individual item I buy.I know it sounds extremely petty quibbling over a couple of pence but its the principle of the matter. Not to mention the fact that if you imagine it happening on every single purchase you make over an entire year that 3p will soon turn into hundreds of pounds.

Helen
I'm very concerned about rounding up...it'll happen at the till but to a lesser extent.

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