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Sales and Marketing Q&A Forum Post: Setting prices and VAT Q) I am setting up as a personal trainer and want to set my prices competitively, but am concerned how this will be affected once I am liable for VAT. How do I build this in without having to raise my prices once I am liable? Answered by Philip Wilkinson, Business Link, You are facing the dilemma every business faces when they register for VAT, either voluntarily or through reaching the turnover threshold. This is whether to absorb the VAT cost, or to put your prices up. If your competitors are VAT registered, they will also have to pay this charge, so you should be competitive. How price sensitive is your market? People buy value, a perception of what they get for what they pay; if you concentrate on adding value and strong customer care, pricing becomes less critical and you are more likely to absorb the VAT cost by raising your prices to cover. On your invoice, you could consider showing VAT separately, at least initially. There are currently no comments on this post. Leave a comment
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