A few points:
1 – it was confirmed yesterday the main vat rate goes back to 17.5% from 1 January 2010.
2 – note that flat rate bands increase but not necessarily to the pre 1 December 2008 levels – some are being changed to reflect latest information on the nature of vat claims and the ratio of inputs to outputs (remembering the flat rate bands are designed to be fiscally neutral). HMRC says:
“The flat rate scheme provides an optional simplified VAT arrangement for businesses with a turnover up to £150,000. The percentages were re-calculated in December 2008 to reflect the temporary reduction in the standard rate of VAT. The flat rate percentages have now been re-calculated to reflect the reversion of the standard rate of VAT to 17.5%. The new rates will be implemented on 1 January 2010.
“They also include technical adjustments to reflect more up to date business patterns. This means that, for some sectors, the rates will not simply return to the level set prior to the December 08 changes. Virtually all sectors will face an increase (as a result of the increase in the standard rate) but some sectors’ increases will be bigger than others’.
“This is consistent with the approach adopted last year when the standard rate went down. It should also be noted that from January over two thirds of users have a lower rate or the same rate as they did last December when the flat rates changed to reflect the 15% VAT rate.”
Alas the new rates don’t seem to have been published yet – we’ll let you know as soon as they do.
3 – From 1 January the VAT on services supplied in other EU countries changes. If you provide services to businesses or individuals in other EU counties, or receive such services, please speak to us for advise. This does not effect non EU countries, nor goods (as distinct from services).
4 – from 1 April 2010 most businesses have to submit vat returns online compulsorily – this applies to new registrations from that date and existing businesses turning over more than £100,000.