VAT: Standard rate back to 17.5%

The VAT rate reverts back to 17.5% with effect from 1 January 2010. The normal ‘tax point’ rules will apply, so if an invoice is made before 1 January the 15% rate will apply, anything after will be at 17.5%.

HM Revenue & Customs has produced some useful guidance on their website. Click here for full details of the changes.

The basic rules are:

  • Start accounting for VAT @ 17.5% with effect from 1 January 2010. The VAT fraction will be 7/47ths.
  • If a customer with an account takes goods prior to 1 January then you account for VAT at 15%.
  • For supplies of services which span the date change, then you charge 15% for those services before the change and 17.5% afterwards or charge all at 17.5% when invoicing.
  • If you are producing quotes and estimates for work after 1 January, remember to include VAT at 17.5%.
  • The increase in VAT will also lead to changes to the Flat Rate Scheme percentages and to the Fuel Scale Charges. If your VAT period spans the 1 January date, you will have to do two sets of calculations.

Please refer to the HM Revenue & Customs website for full details or call Turnbull Associates on 01923 224411.

Online filing of VAT returns

Major changes are coming next year to the VAT filing and payment arrangements for some businesses.

What are the changes?

  • Under current proposals all VAT registered businesses with a turnover of £100,000 or more (excluding VAT) must file their VAT Returns online.
  • They must also pay any VAT due electronically and they will have additional time to do this.
  • The rules also apply to new businesses regardless of their turnover.
  • Filing paper returns will still be an option for those with net turnover of less than £100,000 but this could change by 2012.

When do the changes come into force?

The changes will come into force for any periods beginning on or after 1 April 2010. The HM Revenue & Customs campaign has already started, and will extend well into 2010, so look out for information coming through the post.

How can we help you?

At Turnbull Associates we pride ourselves in providing a quick, efficient service for Bookkeeping and VAT Returns at an affordable price.

If we do not already prepare your VAT Returns, but you would like our help with the online filing, please contact us. We can take the hassle of administration away from you, leaving you to concentrate on your business.