VAT changes to 20%
The standard rate of VAT is currently 17.5 per cent but will be increased to 20 per cent on 4 January 2011.
For any sales of standard-rated goods or services that you make on or after 4 January 2011 you must charge VAT at the 20 per cent rate. If you have a cash business and calculate your VAT using the VAT fraction you must use the VAT fraction of 1/6 on your standard-rated VAT inclusive sales from 4 January 2011.
The change only applies to the standard VAT rate. There are no changes to sales that are zero-rated or reduced-rated for VAT. Similarly, there are no changes to the VAT exemptions. Any sales you make at these rates are unaffected by this change.
For those clients who run a computerised accounts system, the procedures for changing the VAT rates will be identical as to when the VAT rates temporarily changed in December 2008. Please see the article below headed 15 % VAT.
If you require any further information, please contact us on 01706 826757
