UK VAT charges from 12th March

Update! One week later, I have reversed this decision. I am leaving this post up to show the process I’m working through, but please disregard the information below and read this follow-up post for the latest information. Thank you!

It is with a heavy heart that I announce a price hike for UK customers only, from mid-March 2019.

The price increase is 20%. It goes straight to the government in the form of VAT (I don’t see a penny, just so we’re clear!) And this is only for UK customers – everyone else is unaffected.

As you can imagine, this was not a fun thing to have to do. I work hard to make sure prices are right and fair, so it was frustrating to receive the news from our accountant this week that it was time to begin the process of becoming a VAT-registered business – and with that, raise prices by 20%.

It’s a decision most small business must face sooner or later.

Stay under the threshold, or add VAT to UK sales. My instinctive decision was to stay under the threshold. ‘Staying small’ is an important challenge for me, and I am continually looking for ways to keep Little Red Tarot light, agile, and affordable. I have no desire to turn my shop into a big operation with numerous staff and complex logistics (it’s complicated enough managing all these different products as it is!)

But in this case, ‘staying small’ means reducing UK sales. And the only way I can find to do this is to ‘hide’ certain best-selling products from UK customers. Pretty ridiculous, huh? To have goods here on the shelves but refuse to sell them to folks here in the UK. (I can already imagine the confusion/outcry on Instagram as UK customers notice others outside the UK are still able to purchase popular items!) I am still trying to find alternative ways to reduce UK sales, but I’m struggling to see how it can be done.

I decided that charging VAT, however frustrating, is the better option.

It’s more honest and upfront. In adding VAT to the price, at least UK customers still have the option, to purchase or not. If I simply hide the products, I take that choice away.

So, that’s what I’ve decided – for now. In the UK only, 20% has been added to all products, and please understand that this is not profit. I don’t receive this money, I pay it to the UK government, and that is just how this works.

UK customers will see a breakdown of the VAT cost at checkout. (I have not yet added VAT to shipping, and am seeking advice on this.)

Meanwhile I have spot checked some US-sourced products and found that it is still cheaper to purchase from Little Red Tarot than to buy from the US – thanks to the high US postage costs. That is not to mention the potential customs bill, typically around £12-18 for a single item.

The prices of LRT items are set by adding together the actual cost of the items, postage, customs duty and import tax, plus the cost of paying Hele and myself. It’s a lot! (And whilst I’m proud to have built a small business that pays me a sustainable living and supports other artists and creators too, nobody here is making megabucks.) Adding a further 20% to prices that are already inaccessible to many is, quite honestly, heartbreaking.

But taxes are a reality for any business, and must be paid, and so, here we are. As Little Red Tarot’s popularity grew and I joyfully responded to customer requests to bring in this deck or that, this day was inevitable.

Thank you, as always, for your support so far in this business journey.

15 comments

  1. Kasia Licwinko says:

    Hey Beth, thanks for clarifying this. Yes, I did notice the price hike and was wondering…I hope all goes well and I will continue to support your business and also independent artists. You are right, your prices are still smaller compared to ordering decks from US or Oz. Thanks!

    • Kerstin says:

      Your shop will continue to be my first choice for acquiring independently published decks and magical items, and this is for multiple reasons. Not only do I greatly appreciate your ethics and the incredible customer service you offer, I also love the fact that you have hand picked every item that goes on your shelves. It makes me sad to think that you have to explain why you must charge money not only for the actual material you use but also for your time. Honestly, if there is no profit then how could this still be called a business? If I want to add decks to a previous order then it makes perfect sense to pay an extra amount because you will then be spending time tending to my orders – time you would have otherwise spent on working and making a profit in your business. Why is it that there is so much stigma around people actually thriving from their businesses? Must we only be able to cover direct costs? Is a profit always a vulgar thing? And if that’s the case, why do people then turn to mass produced decks? Do they not think that those companies charge a good margin on their products? I strongly believe in voting with your wallet. I purchase from businesses such as yours not only to receive premium goods but also to do my part in trying to keep these businesses around and thriving.

      So thank you Beth, for everything you do.

  2. Niall Walker says:

    Hi Beth, books are VAT exempt in the UK, however all your books have gone up too. Some of your books are now more expensive than their publication price ie “Kitchen Table Tarot” book publishers price £13.99, LRT price £18 and “Seventy-Eight Degrees of Wisdom” publishers price £14.99 LRT price £16.80 etc. You may want to check it out. Very best wishes to you N.

    • Beth says:

      Thanks for this Niall. I hadn’t realised books were charged differently and will definitely check this out today!! Appreciate your patience as I work through the teething troubles of having to install a whole new system.

      • Beth says:

        UPDATE: I’ve checked out the rules around books and other printed matter (for a joyous moment I thought card decks might be exempt! Alas, not so.) But you’re absolutely right about books, and I can confirm I’ve now made books tax-exempt in the LRT shop.

        Today I will comb through this week’s orders and refund any VAT payments made on books by UK customers.

    • Beth says:

      Thanks. I have to pay VAT on UK sales regardless of where the items were purchased – it is the customer location that determines the tax status and thus the cost to me. It’s so frustrating.

    • Beth says:

      To clarity when and what any increases may be – the VAT (i.e. the big awful price hike) was only added on 12th March. Other individual items do occasionally rise in price by a few pounds here and there, this is just a reflection of a wholesale price increase. As for the £3 for adding items to previous orders, this has been in place for quite a long time – I’m still working on a better solution, but right now because of the way we reserve in-stock items for people whose orders also include back-orders, it ends up being quite a big and time-consuming task when someone adds items to previous orders, time I have to pay for. Until I find a more cunning solution, I have added this charge to cover the cost. I’m working on it!

      I really want to stress that there is no joy for me in this, and the price increases you mention do not reflect profit increases. I have no desire to eke more money out of loyal and much-valued customers and I spend so much time thinking about how to stay small and ethical and in connection with the people I serve and the people I buy from. I’ve spot-checked a few products and found that compared to purchasing from the US, most are still cheaper from LRT, though only by a small margin now, rather than the big savings I could previously offer. I hope that the savings available pre-VATY demonstrate how fairly priced these goods have been and hopefully allay concerns that I’m trying to overcharge anyone for things.

      I have absolutely loved crafting a business that makes these beautiful creations more accessible to customers here in the UK, and I’m finding it heartbreaking that VAT means this is very, very difficult. My Brexit survival plan was just to be come super-duper fabulous for UK customers, like, the absolute best customer experience anyone could wish for, I’ve been making so many plans for improvements to the UK experience, all to be rolled out over coming months. So the news about VAT was like a kick in the teeth. Though I agree wholeheartedly with paying taxes and have no desire to avoid or evade them, the way they hit certain businesses in different ways (e.g. mine has a high turnover but low profits) is really challenging my resolve. It’s making me question whether I want to be in retail business at all, quite honestly. I just do not know what to do for the best (er, besides moving to Ireland!!)

      • Nirmala Edelstein says:

        Hi Beth,

        Please, please, please do not stop selling your wonderful products! I don’t wish to speak on behalf of others, but if I can afford to spend £40 on a TAROT DECK, which is a LUXURY ITEM, then I’m sure I can find a way to spend an extra £8 VAT if I really want it, which outweighs the cost of US shipping, duty and customs tax. I’m sorry, but you shouldn’t have to apologize for growing bigger and being successful. We are all responsible for how we manage our own funds and how much money we choose to spend on tarot and oracle decks, and I will always be happy to support your business, with or without UK VAT, so long as I am able to afford luxury, indie decks, which is a particular passion for me and for a lot of other people out there. Some people spend hundreds on shoes, or nail salons, or cars, or whatever else, and some of us spend it on LTR decks :-) And if someone has been economizing their pennies to afford a £50/£60 tarot deck for months, then they surely had a passionate motivation to do so anyway. Don’t let the naysayers drag you down Beth!

        • Beth says:

          Thanks Nirmala – it is so helpful to read supportive comments. I’m so grateful to hear you’ll stick with LRT – it means a lot at a scary time!

          It’s true, these *are* luxury items – I definitely understand that LRT is a ‘treat shop’! Still it is tough to accept that this makes these lovely decks unaffordable for another tier of people, and that customers feel let down or hard-done-by.

          I absolutely understand the outcry about the price hike – I would feel the same! It was so sudden and by such a lot. In business forums I’ve witnessed other business owners face this challenge too – some find ways to stay small, others take a deep breath and begin charging VAT. I’m very open to suggestions!

          Anyway don’t worry, I’m not going anywhere just yet, if nothing else I’m gonna ride Brexit out and see what happens on the other side (um…if we ever get there!)

  3. Maria-Anna says:

    I am sorry to hear about your heartbreak on this issue! What a shame to be put in such a seemingly unsolvable position, caught between the growth of a business one has lovingly worked on and one’s various customers/audiences.

    I had just a point of interest. I noticed the range in the shop increase quite a lot in the last few months (perhaps since the ending of the LRT blog when the shop became more serious as a separate entity). I always quite enjoyed the small range of the original shop and although many of the recently added books etc do look very enticing to me, I primarily keep coming back for the decks. So I wondered whether a more limited range in the past meant that the business stayed under the VAT threshold – or whether the natural growth of the shop means the increased range does not make much of a difference in this respect?

    I hope this doesn’t feel too much like prying. I have always appreciated the honesty and clarity in how you communicate about your business!

    • Beth says:

      Thanks Maria! Not prying at all, I really value this conversation :)

      You raise a good point about the expanding selection. One of the things I make a point of in this business is responding to customers – and my customers do love to tell me about new decks! I really appreciate that – and I love being in conversation withy customers in this way.

      As sales increased last year, especially around Christmas, I had more cash to play with, which I merrily invested in new and different stock.

      I’m serious about staying small and thinking shrinking the range is one way to do this. I’m up to my neck in accounting paperwork right now (as you can imagine!) but am starting to compile a list of things I could stop stocking (books certainly, but also various decks) in the hope of bringing sales back down under the threshold. It’s hard, because I truly love and believe in every single item I sell! But more than this, I want to offer fair prices to my customers – and avoid the headache, faff and expense of being VAT-registered.

      I’ll be making lots of changes in response to this situation in coming months, and promise to keep folks posted here on the blog.

      • Maria-Anna says:

        Thanks for your reply! Again, I really appreciate how you approach all these issues with unwavering transparency that lets everyone involved feel like they have a stake (business customers as well as owners & workers). Wishing you lots of energy for the paperwork and inspiration for the thinking! I feel reassured that the best solution will emerge. :)

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