... gasps the Metro.
Yeah right.
Sure, their 'underlying profit before tax'* went up by £55 million, and gross sales in the year to 21 March 2009 are up 5.7% by value (see page 12), but ...
Out of total gross sales of £20,383 million, £1,472 million was VAT. Let's guess that half of that relates to period 1 December 2008 to 21 March 2009 (because that includes the Xmas period), i.e. £736 million. The VAT rate went down from 17.5% to 15% on 1 December 2008, so if Sainsbury's had not passed on the VAT cut, they would have saved about £123 million in VAT (£736 million ÷ 15 x 2.5), so you could argue that all they had to do to achieve this superficially excellent result was to pass on about half the VAT cut and keep half for themselves in extra profits.
Either way, the liability for VAT (The Worst Tax Of All) completely eclipses the corporation tax charge of £177 million for the year.
* If you minus off property losses, profits are down by £50 million, of course ...
A grim document
15 hours ago
6 comments:
Typical Metro journalism, and typical Sainsbury's silver lining. We're now in a market where banks are unlikely to lend, and for a large company to then tart up its profits to encourage us to spend our big fat wodge of nothing there is a little circumspect.
Yet another example, it would seem, of a 'professional' journalist parroting material they are given without reading it, but preferably engaging brain and asking themselves a few questions - as you have done.
sorry should have read
but instead preferably engaging brain......
WFW, don't worry, it was clear enough!
MW,
But the government HAVEN'T extorted half the VAT cut so it has helped the real economy.
AC1, that was sort of one of my points, what appears to be a modest VAT cut has helped Sainsbury's investors, customers and employees most enormously!
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