Lees Solicitors - VAT increase from 1 January 2010 - Jon Bloor

Business Services News

VAT increase from 1 January 2010 - Jon Bloor


VAT increase from 1 January 2010 - Jon Bloor

The standard rate of VAT on goods and services will revert to 17.5% from 1 January 2010. The timing of this change is obviously not ideal for retail businesses in particular as it falls in the middle of the busiest trading period of the year. There are a number of administrative issues for businesses to deal with before the increase comes into effect, including:

From 1 January 2010 businesses must:

  • Alter their VAT accounting processes so that they account to HMRC for output tax at the correct rate and claim credit for input tax at the correct rate.
  • If they intend to pass the VAT standard rate increase on to their customers:
    - Adjust their tills to charge VAT at 17.5%; or
    - Reprice their goods.
  • Put in place procedures for dealing with VAT on refunded goods, which usually peak after Christmas.

There is also a concession in place for bars and other businesses which may be trading after midnight on 31 December 2009. Full details of this are available on the HMRC website at http://www.hmrc.gov.uk/briefs/vat/brief6809.htm.

Jon Bloor

This article provides a summary of a recent change in law. It is intended for general information purposes only and is not to be relied upon. It does not constitute legal advice and should not be treated under any circumstances as a substitute for legal advice. Lees Solicitors LLP does not accept any responsibility for any loss that may arise from reliance upon the information contained within this article. The copyright in this article is owned by Lees Solicitors LLP and permission must be sought before reproduction or publishing.


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