All announcements about VAT changes.
The standard rate of VAT will increase to 20 per cent on 4 January 2011.
Zero rated supplies, such as basic foodstuffs, children’s clothing and books; exempt supplies, such as education and health; and supplies subject to VAT at the reduced 5 per cent rate, such as domestic fuel and power, are not affected by this change.
There are no changes to the Cash Accounting or Annual Accounting Scheme.
Anti-forestalling legislation will be included in the Finance Bill 2010 to prevent the 17.5 per cent rate applying to supplies of goods or services that are provided on or after 4 January 2011, subject to certain conditions.
Following the increase in the standard rate of VAT from 17.5 per cent to 20 per cent on 4 January 2011 anti-forestalling legislation is included in the Finance Bill 2010 to prevent the 17.5 per cent VAT rate applying to supplies of goods or services provided on or after 4 January 2011, subject to certain conditions.
Draft legislation and an explanatory note for this change have been published on the HMRC web site.
As a consequence of the increase of the standard rate of VAT from 17.5 per cent to 20 per cent, the Flat Rate Scheme (FRS) sector flat rates have also been recalculated to reflect the increase.
Some of the thresholds applicable to the scheme have also been revised to reflect the increase in the standard rate of VAT to 20 per cent.
