New Year new rate
The reintroduction of the standard rate of VAT at 17.5% will welcome in the New Year. For sales of standard rated goods or services that take place on or after 1 January 2010, a business should charge VAT at the new rate of 17.5% rather than 15%.
If you are a non-business consumer maybe now is the time to purchase those larger items and save 2.5%. For business customers that cannot fully recover their VAT cost, there may also be some scope to save VAT before the increase although advice is needed to ensure anti-avoidance rules are not triggered.
For all businesses charging VAT at the standard rate on their supplies care will be needed (as on the previous change of rate on 1 December 2008) to ensure that the correct rate is charged depending on the effective date of supply. This will vary, depending on the type of supply of goods/services, when it is invoiced and when payment is received. Please contact us if you need further guidance on these areas for your business.
Disclaimer - for information of users: This newsletter is published for the information of clients. It provides only an overview of the regulations in force at the date of publication, and no action should be taken without consulting the detailed legislation or seeking professional advice. Therefore no responsibility for loss occasioned by any person acting or refraining from action as a result of the material contained in this newsletter can be accepted by the authors or the firm.
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