U.K. Bookings - interesting FT article on voluntary service charges

interesting article in Financial Times on Value Added Tax VAT (ok as interesting as any article can be on VAT) when paying voluntary service charges in the U.K.

was thinking how this might work in relation to service charges paid up front to Celebrity in the UK or on board later.

Essentially no VAT on voluntary charges- onlynon compulsory charges.

https://www.ft.com/content/3eee193e-dc0b-11e7-9504-59efdb70e12f

This is one of the reasons our cousins across the Pond like their taxes added on at the end - so they can see the full charges and calculate their tips accordingly. I won't comment on wages/salaries in either country... but do expect this thread to turn into a bun fight!

This is one of the reasons our cousins across the Pond like their taxes added on at the end - so they can see the full charges and calculate their tips accordingly. I won't comment on wages/salaries in either country... but do expect this thread to turn into a bun fight!

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This is one of the reasons our cousins across the Pond like their taxes added on at the end - so they can see the full charges and calculate their tips accordingly. I won't comment on wages/salaries in either country... but do expect this thread to turn into a bun fight!

I thought that it was interesting that maybe the cruiselines didn't need their hand forcing too much to switch from compulsory service charges to voluntary service charges with a 20% tax saving to them that is not passed on to the customer.

I have mixed views on final prices - yes it's convenient to have a final price displayed but I suspect the treasury and evidently some businesses might feel nervous about most of seeing how much we pay in tax and other imposed fees, charges and duties. I remember buying a very cheap ticket to LA from London with Swissair via Zurich about 10'years ago - circa £300. When I looked into the price breakdown from Swissair the total ticket fare was about £70 (£40 out and £30 back) the rest was taxes, fees, security charges and so on. Compare that with a £340 economy return train ticket between Manchester and London tomorrow - with U.K. Train fares not subject to VAT!

This is one of the reasons our cousins across the Pond like their taxes added on at the end - so they can see the full charges and calculate their tips accordingly. I won't comment on wages/salaries in either country... but do expect this thread to turn into a bun fight!

I've always said on here, scrap grats, include them in the cruise fare and if you want to make additional tips for good service you still can, there are no losers only winners then. Seriously cba to engage in a bun fight on the topic though.

interesting article in Financial Times on Value Added Tax VAT (ok as interesting as any article can be on VAT) when paying voluntary service charges in the U.K.

 

was thinking how this might work in relation to service charges paid up front to Celebrity in the UK or on board later.

 

Essentially no VAT on voluntary charges- onlynon compulsory charges.

 

https://www.ft.com/content/3eee193e-dc0b-11e7-9504-59efdb70e12f

You do realise that there is no VAT on cruises, don't you, and that VAT is only charged on purchases on board in limited circumstances? Service charges are payable on only a percentage of those VATable purchases. In view of this, this article has minimal relevance to cruising.

I've always said on here, scrap grats, include them in the cruise fare and if you want to make additional tips for good service you still can, there are no losers only winners then. Seriously cba to engage in a bun fight on the topic though.

This exact comment was voiced by those of us in NZ and Australia. Most other cruise lines based downunder have done just that. About 18 months ago Celebrity and Royal Caribbean included gratuities as part of the cruise fare. As a consequence we can no longer opt out of gratuities

You do realise that there is no VAT on cruises, don't you, and that VAT is only charged on purchases on board in limited circumstances? Service charges are payable on only a percentage of those VATable purchases. In view of this, this article has minimal relevance to cruising.

Didn't realise that (obviously realised it didn't apply to onboard purchases if you leave the EU) - So my cruise bill that I pay up front to Celebrity in the UK is VAT free? that's today's thing I found out :p

This exact comment was voiced by those of us in NZ and Australia. Most other cruise lines based downunder have done just that. About 18 months ago Celebrity and Royal Caribbean included gratuities as part of the cruise fare. As a consequence we can no longer opt out of gratuities

See in my mind I don't really see it as 'opting out' or opting in. I see it more as having the cruise line remunerate their staff correctly and fairly. Paying them what they deserve etc rather than relying on passengers to effectively make up their wages.

Didn't realise that (obviously realised it didn't apply to onboard purchases if you leave the EU) - So my cruise bill that I pay up front to Celebrity in the UK is VAT free? that's today's thing I found out :p

I only found out when VAT was increased to 20%.

Thanks for sharing the link to this article.

Keith

Thanks for sharing.

See in my mind I don't really see it as 'opting out' or opting in. I see it more as having the cruise line remunerate their staff correctly and fairly. Paying them what they deserve etc rather than relying on passengers to effectively make up their wages.

I totally agree.