VAT price reductions at Tesco Direct

On 1st December VAT was reduced from 17.5% to 15%. This new rate of VAT applies to all products on Tesco Direct.

How are we passing the saving on to you?

All prices currently displayed on Tesco Direct include VAT at 17.5%. These prices will be automatically discounted at the checkout to be equivalent to the new 15% VAT prices. This means a discount of 2.13% on the item(s) selected. The total saving will be clearly shown on your receipt.

Why is this discount 2.13% and not 2.5%?

The example below illustrates how the discount is calculated:

• A product selling for £10 has a price excluding VAT at 17.5% of £8.51
• If you apply the new VAT rate of 15% to the price excluding VAT (£8.51), it gives the new price of £9.79
• The new VAT rate equates to a saving of £0.21 (£10 - £9.79 = £0.21)
• This equals the same as taking 2.13% (or 21p) off the original £10 price.

Delivery charges

All delivery charges displayed across the site include VAT at 17.5%. These charges will be automatically discounted at the checkout to be equivalent to the new 15% VAT prices. The new rates are:

• Standard next day delivery reduced from £4.85 to £4.74
• 2 hour time slot delivery reduced from £6.85 to £6.70