Advice to Members re. VAT rate change
On 1 January 2010 the standard rate of VAT will revert to 17.5%, having been temporarily reduced to 15% from 1 December 2008.
Once again HMRC have issued notes which give clear guidance on this latest change and these can be found at:
In particular you are referred to the page entitled Increase in the standard VAT rate, and the sections sales that span the change in rate and raising VAT invoices or receiving deposits before 1 January 2010 for sales you make afterwards
In addition you are recommended to consult the special rules for services that span the change in rate. These provide certain options that are available to members, who should be aware that their services are likely to constitute single supplies carried out over a period of time (see section 3.4.2). One of the options on claims that are concluded in 2010 is to charge VAT at 15% on work carried out before 1 January 2010 and 17.5% on the remainder, but you will need to be able to show that any apportionment is accurate and fair.
If you are in any doubt or want detailed advice we suggest you consult your VAT adviser or HMRC.
This note updates previous advice that was issued to members re. the VAT rate change which can be found here:
