Cookies are small text files that are stored on your computer when you visit a website. They are mainly used as a way of improving the website functionalities or to provide more advanced statistical data.
Planning for the VAT Increase
Newsletter issue - November 2010.
We know the standard rate of VAT will increase on 4 January 2011 from 17.5% to 20%, but will your business be ready?
It may be difficult for retail businesses to re-price everything displayed in the store over the New Year break, ready for opening on 4 January. Fortunately the law does allow you to make the adjustment from 17.5% to 20% VAT at the till for up to 28 days after the VAT increase. You do need to notify your customers that you are making this adjustment so have a sign advising customers that a price adjustment will be made at point of sale to reflect the increased VAT, and find time to reprogramme your tills before 4 January!
An alternative approach is to increase all your prices before 4 January 2011 to accommodate the higher VAT rate. If you are having new menus printed for winter, now could be a good time to make the price changes.
Where a customer places an order before 4 January 2011 for goods or services to be delivered after that date, you can generally charge VAT at the current standard rate of 17.5%. To apply the current rate of VAT you must either issue an invoice, or receive a payment before 4 January 2011. You should not artificially advance sales by issuing invoices that are not due for payment for six months or more. You will also be caught by anti-avoidance rules if your business is connected with your customer, or the amount due is £100,000 or more.
If you use the flat rate scheme for small businesses you need to check-out the flat rates that will apply from 4 January 2011, as set out on the HMRC guidance website: http://www.hmrc.gov.uk/vat/start/schemes/flat-rate.htm#5a
You may find that when you apply the new flat rate to the gross sales made on and after 4 January 2011, you will be worse off than operating outside the flat rate scheme. If this is the case you need to inform the VAT office in writing that you want to leave the flat rate scheme. It's easiest if you do this with effect from the start of your next VAT quarter. If you leave the flat rate scheme you can't rejoin the scheme for at least 12 months.
For specific advice on how to deal with the VAT rate change in your business, please contact us.
JOIN OUR NEWSLETTER
Sign up with your email to get updates about
resources releases, tax news and special offers.
- GET A FIXED QUOTE
- BUSINESS ADVICE
- PERSONALISED SERVICE
Saving money on your Mileage and Tax Bill
Are you like many of our clients, somewhat struggling at keeping track of your mileage to offset... Read More
Posted on Wed, 19 Aug 2015
TWITTER
Tweets by @OWSupportOne of the headline areas of tax reform in the Autumn Budget surrounded Capital Gains Tax. With rates altered by the Chancellor, it was one of the...
Tax rules for individuals and companies using alternative finance are to change. The Government released plans for reform on the day of the Autumn...
With Christmas soon arriving, you may be planning a festive party for your employees or on behalf of the company you work for....
Plans to change tax compliance rules for charities are moving forward, as the new Government picks up proposals for reform to prevent misuse....
Q: I own a second home worth £400,000, which I bought for £250,000 and I have shares valued at £50,000, which I purchased for...
19 December - For employers operating PAYE, this is the deadline to send an Employer Payment Summary (EPS) to claim any reduction on what you’ll...