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Increased VAT Rates
Standard Rate Vat Increase
On the of 4th January 2011 the standard rate of VAT will increase from 17.5% to 20%.
Goods/services provided before the change
The new rate generally applies to all VAT invoices issued by a business on or after 4th January 2011. However, where a business issues an invoice on or after 4th January 2011 and the goods or services were provided prior to 4th January 2011, the business may apply VAT at 17.5%.
Goods provided after the change
If a business has received a payment or issued an invoice before 4th January 2011 but the goods will be provided (or services delivered) after 4th January 2011 then the supplier has a choice, either:
to leave the VAT charged at 17.5%; or
to account for VAT at the new 20% rate.
Accountancy Software & EPOS Tills
Most accountancy software and EPOS tills will have the ability to update the standard VAT rate – however it may be preferable to create a new VAT rate as the old may not be required for some time.
Advice from HMRC
Clearly advice will differ from one business to another so we suggest reading these notes from HMRC.
Alternatively you can contact us to make sure your needs are being met.