Do you need help dealing with the change to 20% VAT?

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Last year we advised our contacts about various issues that may affect VAT registered traders from 4 January 2011, when the standard rate increased to 20%.

Here's a quick recap.

1. If you have accounting software, be sure to make the appropriate changes to the standard VAT rate. You should have been advised by your software provider how to do this.

2. If you use the Flat Rate scheme for calculating your quarterly VAT you may need to apply a different flat rate from 4 January.

3. There are various complications to deal with if you use the cash accounting scheme. The first return to be affected will be the VAT return that includes the month of January 2011.

4. If you're providing a supply of goods or services that straddle the 4 January 2011 there are special arrangements you should follow to ensure that you charge VAT on the supply at the correct rate.

If you would like help in dealing with any of these issues please call.

And finally a couple of quick calculation tips:
 
If you want to increase prices to pass on the VAT increase to customers (e.g. if you are a retailer), multiply the previous VAT inclusive price by 48/47. For example - £117.50 (old price) x 48/47 = £120.00 (new VAT inclusive price), and

Instead of multiplying a VAT inclusive by 7/47 to find out how much VAT is included (up to 4 January 2011) you now simply divide the VAT inclusive figure by 6 - to reveal the 20% VAT included.