Tuesday, November 25, 2008
VAT Rate Changes
In his Pre-Budget Report on 24 November 2008 the Chancellor announced that the standard rate of VAT will be reduced to 15% on 1 December 2008.
This means that for any sales of standard-rated goods or services that take place on or after 1 December 2008 providers should charge VAT at the new rate of 15%.
Only standard-rated sales are affected. There are no changes to sales that are zero-rated or reduced-rated for VAT. Similarly, there are no changes to the VAT exemptions.
The 15% rate will remain until 31st December 2009, and from 1 January 2010 it will revert to 17.5%.
HM Revenue and Customs have confirmed that all VAT registered businesses will be sent a guide on how to implement these changes. Detailed guidance can also be found on their website www.hmrc.gov.uk
If you require any further information Revenue and Customs can be contacted directly on 0845 0109000
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