January Fitting

So then, who's booking into January 2011?


We're now planning the first few weeks of next January, which is fantastic news for us. This time last year I wasn't able to be so positive. But this year has seen a marked improvement and we're now able to make a good positive start into 2011.


Lead levels have surprisingly picked up this last week or so. I've had more leads so far this month than October. Usually you would expect that to be the other way round, but I'm not complaining! 


The big question is how do we start pricing up current contracts? If we sign up jobs right at the end of this year at the current VAT rate, do we pay the same to our suppliers? Or do we start charging at the new VAT rate? I'm unsure about this myself. So far what I've sold I've managed to squeeze in before the end of the year. But others have sold jobs for after the New Year.


Anyone else finding themselves in the same situation?

And Now The Rush Begins!

This week has been manic! It's been the usual case of people rushing to get windows and doors ordered and wanting them in before Christmas and before the new VAT rate in January. It never ceases to surprise me even though the same thing happens every year. People seem to wait and wait, put it off for as long as possible, and then they get motivated right at the end of the year when there is very little time left!


Obviously for us sales people it's a very nice and timely boost before the quiet winter period, but it doesn't half create some stress! Your natural selling instinct is telling you that you can promise customers what they order will be fitted before Christmas, but you know full well that there is only a matter of a few fitting days left until you have to start booking into January. 


I can't understand why people leave it so late all the time! Maybe it's me. Maybe I'm too organised and I can't imagine doing the same thing!

Forced To Fit Double Glazing

Before the General Election, there was an idea being thrown around that houses which didn't install home improvements to improve their homes energy efficiency would be penalised in higher council tax rises.


This seems to have been put on the back burner, which is a shame because it would have provided a big boost for the window and door industry.


One thing which I still believe we shouldn't be giving up on is a reduced VAT rate for energy efficient windows, mainly A rated ones now that C rated has become the minimum. A 0% VAT rate for A rated windows when the Government is cutting left right and centre is now out of the question. But a 5% VAT rate I still believe is possible. If they can do it for other such home improvement products there is no argument for not being able to do it for windows.

To Spend Or Not To Spend?

If you've got a few grand knocking about but don't know whether or not to spend it, then the Bank Of England won't have made it any easier.


At the beginning of the week the Bank Of England were saying that to help prop up the economy we all need to be going out and spending more. Half of me likes that idea and half of me doesn't. The half that doesn't is because I myself is doing what the majority of the country are doing and that is getting rid of any debt. For me it's a credit card. Admittedly it's not a massive bill, but I want it gone. Once it has disappeared then I'll have more money to spend (or save) on what I want.


On a national scale the amount of money being re-paid in comparison to loans being taken out is dwarfing the latter. People have finally got the picture that at some point the money they borrowed to go spending has to be given back at some point.


The other half of me which agrees with the B.o.E does so because I rely on the public to be in the buying mood. I need them to keeping buying windows and doors to keep putting a wage in my pocket. If they stop buying, I, as well as everyone else, stops earning. So yes the public need to keep on spending.


What we need is a good balance. People can go out and spend, but they need to reign it in enough so as to leave enough money left to help pay towards bills and loans. What we don't want is the country lurching massively towards one option or the other.


My advice: buy your windows and doors now before VAT goes up and George Osbourne cripples the country with pay freezes and spending cuts!

Will There Be A VAT Panic?

Come 4th January, VAT will be at 20%. But will this make a difference?

When VAT fell to 15% just before the start of 2009, the Government thought that it would give the buying public the nudge to start spending a little more. In reality we found that it made hardly any difference. All it did was make paperwork more difficult when it rose back up to 17.5%. It didn't create a surge in sales, or a spike in new appointments.

And when you turn it into numbers, and extra 2.5% less is only £25 every thousand. It's not going to make much difference on a house full of windows and doors.

So what about the 20% VAT figure. Again I don't think it will have too much of a negative impact on the buying public. Adding another £25 every thousand isn't going to put Mr & Mrs Smith buying that big item, be it holidays, new windows or a new car. What I do think will happen is it will bring the Yorkshire out of everyone. No one likes parting with any more money than they have to. There could be a bit of a rush before the end of the year to replace people's windows and doors before the VAT rate goes up. It's only another £25, but when money is tight and everyone is being as economical with their money as they can, it's an extra bit of cash they won't want to give away.

Who Wins In The Budget?

Right, now we've all been told what we're not getting in the future, we can start to make some assessments. Here's my rough, quick analysis, then I'll explain it a bit further. If your in the public sector you've not got much to cheer about, if your a pensioner that was pretty good listening, if your in business then that statement was also easy listening. But if your a family then depending on your income it was a painful listening.

So then, public sector. Well first off all those that earn over £21,000 are getting a two year pay freeze, and that will probably be extended further if the economy fails to pick up. However, those earning less than that will receive a £250 increase. Councils are also being urged to trim their budgets in return for the government helping them to freeze council tax rates. But this only means one thing, job cuts. Councils are already doing as little as possible in order to conserve money, so the only obvious way to trim further would be to cut jobs. The public sector pensions schemes are also getting re-vamped, but the government is still looking into ways they can be trimmed without creating too much damage.

For all the pensioners out there, all your allowances are staying, plus the link between average earnings and the state pension is being re-established. Pensions will now also go up either by a minimum of 2.5%, or in line with the retail price index (RPI). So not bad at all really.

What does the budget mean for businesses? Well Capital Gains Tax goes up to 28%, not the previously stated 50% which is nice. However VAT, as expected, will rise to 20% as of 4th January 2011 (queue cheesy VAT offers from double glazing companies!). No fuel increases, good news if your a haulage company or van driver. No cigarette increases, good news if your a smoker (RCG!). No increases on alcohol, good news for anyone over the age of 18! So not bad businesses really.

However, the family and the welfare system is the area that is hardest hit. And is also the area where the government is going to recoup most of it's money. Housing benefit has been slashed, tax credits for kids have been frozen and the threshold to apply for it lowered. There are many others I could mention, but would fill this post with more guff than necessary. The point is that this is the area which has taken the hardest hit.

So, what does this all mean if you work in the window industry? Well, if you find you get some of your custom from young families and people who work in the public sector, that area might decline. However, the cancelled rise in NI contributions means the cost of employing staff stays down, and the rise in the income tax threshold means there is more cash in everyone's pocket. If you find you get a large chunk of your business from pensioners, then that should stay the same or maybe even improve. Pensioners stand to benefit from today's budget, other than the rise in VAT, but that I don't think will make much of an impact. We could see a small rise in the older generation replacing their old windows and doors.

One other thing we are going to see is a sharp rise in 'beat the VAT' or 'we pay the VAT increase' offers from companies. It's almost expected these days. It's going to be cheesy, but it's going to happen.

All in all I think this budget has been a decent one. It's risky, but if it works, it will right a very large wrong.

The Beginning Of Cameron's Britain

It took all of about 45 minutes for Britain's colours to change from red to blue. A poignant statement from the outgoing Gordon Brown began the formal pomp and procedures of the Queen asking David Cameron to form the next Government.

So, say hello to increased VAT rates. Say hello to increased petrol prices. Say hello to increased cigarette and beer prices. Say hello to higher inheritance tax. Say hello to the deepest public sending cuts we'll have had for decades. I urge those who haven't read one of my recent articles 'Scary Look Into A Conservative Future'. There were hints in Cameron's speech in front of Number 10 that he was planning to remove Government from certain areas of society, and expected the public to start to fill in the gaps. Read that post and you'll see that in a council in London, that idea went drastically wrong.

I fear that a lot of spending cuts are going to be made too deep and too quickly. And the double glazing industry can wave goodbye to any slim chance of energy rated windows coming with a reduced 5% VAT rate, that's never going to happen now. In fact, we can all look forward to the prospect of VAT being raised to about 20-21%. That combine that with other cuts and tax rises and that really will put the brakes on an industry recovery!

Some may say I'm being cynical. But both my parents and my girlfriend's parents have told me how hard going it was when the Tories were last in power. You never know, Mr Cameron may do a fantastic job, but with the overhaul he's going to have to perform to attempt to get the country back on the right track, I'm doubtful.

We watched something historic take place today. And I assume that over the coming weeks and month, dramatic and life changing decisions are going to be made that are going to affect each and everyone of us. What I hope is that as an industry, we can show the steely resolve that got us through the recession, because I believe we may need to call upon that steely reserve very soon.

Will The Budget Provide Any Cheer For The Window Industry?

We are going to have the last budget before the upcoming election on Wednesday, and I'm sure many in the window industry will be looking to the Government for some much welcome support. Like the car industry and boiler industry, there has been a concerted effort on the Government's petitions website for Number 10 to implement a similar scheme to gove the double glazing industry a boost.

However, I fear that not enough of us went on and signed the petition. Out of the tens of thousands that work in this industry, only 4367 people actually put their name down. This is a very poor showing, and just proves that the window industry remains splintered and lathargic when it comes to putting our collective weight behind things which can improve the sector we work in.

Alistar Darling has already said that the upcoming budget is not going to be a 'give-away' budget, but one that is sensible and one that is designed to secure the economic recovery. Sounds promising, but we need to be hearing of more support for the contruction and green industries.

Wishlist: 5%/0% VAT on energy 'A' rated windows.
                 Scrappage scheme.
             
No how likely do you think these things are?!

Positive First Signs For 2010?

We had two sets of customers place their orders with us today. Normally this wouldn't be such a big deal but what surprised us is that both of them said that they weren't at all bothered about paying the higher VAT rate which comes into force from 1st January. Bear in mind also that these customers had originally been quoted in June, they both had plenty of time to place their order with the 15% VAT applied.

I think what this shows us is that when the VAT rate officially goes back up to 17.5%, just like when the VAT rate was lowered last year, it's not going to make the slightest bit of difference. This can allay any fears that a rise in VAT would cause damage to consumer confidence.

What is also good to see is that we are still doing decent levels of business despite the time of year. This months figures so far have shot way past last December’s which is great to see. It is important to sell a good handful of jobs in December to give the installation teams healthy levels of work to come back. There is no worse way to start the New Year than a spluttering one, scrapping to find the odd window here and door there to fit.

VAT Increase

As everyone will be aware, on the 1st of January VAT will go back up to 17.5%.

To me this won't make a slight bit of difference, just as it didn't make the slightest bit of difference when it was reduced. Double glazing firms don't have to panic about the loss of business because an increase of £25 per £1000 is negligible enough for customers not to worry about it.

What will be a worry is if the government starts to hint at raising the VAT to try and gain some of their lost revenue back, that I think would be the point in which we should be raising some concern.

Budget

Yet again our industry has been ignored. £435 million pounds has been earmarked to improve the insulation of Britain's homes, loft insulation, cavity wall insulation and new energy efficient boilers were mentioned, but nothing about energy efficient windows! I've said it before, it's in the government's interest to help the energy efficient window market, it will aid them to achieve their targets to lower homes' carbon emissions. So with this news, i think we can kiss our %5 VAT rates on energy efficient windows goodbye!

VAT Attack

Figures released today show that RPI measure of inflation for the UK has fallen to zilch percent. On top of that interest rates are practically at zero too. So with the price of living coming down, and all the government initiatives to try to get people spending again, I've failed to witness any marked increase in activity in the double glazing industry.

In my eyes, to really make a difference in this market place, the government needs to do what its done with things like the cavity wall and roof insulation markets, give us a 5% VAT rate on all energy rated windows. The 2.5% decrease in VAT last December did nothing to spark the sending spree the government wanted, neither did it spark any sort of spending spree for windows and doors. Energy saving windows is the sole direction this market is going to follow, a 5% VAT rate on all energy saving products would not only help the general public in being able to afford these brilliant innovations, but it would give those companies who are selling energy rated products a huge selling point.

For those who aren't yet geared up for selling and installing energy rated windows, a 5% VAT rate may be the final push they needed to start to incorporate WER products into their portfolio. There's an advantage for the government here too. The more companies that install energy rated products, the closer they are to achieving their carbon emission targets!

So its frustrating as well perplexing as to why we as an industry have been ignored. Just like the Fighting Back With Facts campaign, perhaps we need to create an industry wide effort to get our voices heard.