This post was originally published on my old blog on December 1st, 2008
So today’s the day everyone reduces their VAT to 15%, as this is apparently the magic fix to the current recession problem (that’s a whole other discussion!). As a developer of ecommerce sites I’m finding this morning particularly busy.
I’m finding a lot of clients are wanting to adjust prices on their products after the VAT has been reduced so as to keep the overall price the same – most people bought in their stock at the higher level of VAT so rightly don’t want to make a loss.
Going through every product individually and increasing the price manually can obviously be extremely tedious on a big website. Luckily there’s a simple way of working out exactly how much to increase the price of every product in one go:
Let’s say you have a product that costs £100 excluding VAT. At 17.5% VAT the overall cost was £117.50, but at the new 15% level of VAT that price becomes £115. We could just add £2.50, but as the increase we need to make will be the same proportion for every product, we can find a number to multiply by 115 to get 117.5, and in turn, the right increase for every product. This is where a little algebra comes in… (if I’ve lost you here you can just skip the first 2 lines!)
115 x number = 117.5
number = 117.5 / 115
number = 1.0217391304347826…
So there you have it – multiplying the price of every product by a little over 1.02 should give you the same price you had before the drop in VAT. If you have access to your ecommerce site’s database, you can run a single SQL query which should update all of your prices in one go (make sure you backup the database beforehand – just in case!):
update products set products_price = (products_price * 1.0217391304347826);
Where products is your products table and products_price is the name of your products price field.