Unless you have been living under a rock for the past week, you are probably aware that the rate of UK VAT (Value Added Tax) will be changing from 17.5% to 15% with almost immediate effect. A change to such a fundamental tax will impact a huge swathe of UK businesses, but those businesses with an e-marketing presence will need to make extra checks and changes in order to remain competitive and compliant. Receptional have compiled a useful list of areas that you might want to check to ensure you are prepared and how you can possibly benefit from the changes.

Prices published on your website

The most obvious place that price changes will take effect on is your own website(s), you will need to ensure that any prices that are displayed inclusive of VAT are changed, and if VAT is displayed separately then the figure is calculated at 15%. Remember that VAT will also be applied to any shipping prices as well so these will need to change too, along with any mention of VAT (in terms and conditions for example).

Depending on the type of online business you run and the systems you use to manage your website, changing prices may be a more arduous task than you imagine - for example some e-commerce platforms have the VAT value hardcoded into the system and to alter this will require a coder to make the change. Check to see if this will be a problem as soon as possible as you may need to hire an external developer or download and install patches for your software. It is worth noting at this stage that VAT is likely to revert back to 17.5% (or higher if recent press speculation is to be believed) within 13 months, so if you have to get a third party to change the site then making it easier to change VAT manually in the future may be a feature you should consider specifying. If the cost of adding this type of feature is prohibitive, then asking the developer to write some instructions on how to change the VAT value would be a good idea - this way you can speed up the job (and hence pay less for the development) next time.

Pay per click campaigns

The use of prices as a unique selling point in pay per click adverts is quite a common tactic, so if you use this technique be sure to check the advert text for price accuracy - you don't want to appear more expensive next to competitors just because you haven't made the price changes and they have!

If you use an external agency for pay per click advertising don't expect them to have made the changes to your prices automatically so get in contact to check with them. Likewise if you sell products that are VAT exempt (i.e. childrens clothes) or charged at a lower rate of VAT (i.e. energy) then make sure your web agency has not taken 2.5% off these prices by mistake.

Price comparison sites, affiliate programmes and product feeds.

If you promote your products on 3rd party websites such as price comparison sites, affiliate programmes or products feeds, then ensure that your prices are updated as soon as possible after the 1st December 2008. Not every business will have managed to update their prices in time on these types of sites so by ensuring you have factored in the reduction you can appear to be cheaper than your competitors.

Of course ensuring that the prices are correct on your website is vital as a customer arriving from a price comparison site only to find that the price is listed as more expensive your website is a sure fire way to see your conversion rate bomb.

Some affiliate publishers will have hardcoded prices into their websites and may not be aware of the need to change prices. Communication with these publishers (either directly from you, or through an affiliate network if you use one) is a must. You could consider altering your offer or introducing a special offer or promotion in order to encourage publishers to change prices.

Banner campaigns

Banner campaigns that mention prices are a bit tricky to manage in this situation as banners are typically flat images or compiled files such as Adobe Flash, both of which will require changes to be made to the source code of the files. The production of graphical banner adverts is typically carried out by graphics specialists so contacting your supplier for urgent changes should be your first port of call.

Due to the perceived risk to the economy, the government has rushed through these tax changes in an unprecedented manner leaving businesses with very little time to react, but getting a plan together and acting quickly could reap rewards for your online strategy at a time when good performance is more important than ever.

Matt Springbett