In case you have a running business in the United Kingdom or plan to start one you then should know all about the rise in hmrc vat rates in the vatcontrol.com/vat coming year. This will help you to quickly incorporate all the necessary changes in your vat invoices and vat returns, and enable you to keep on running your enterprise without any interruptions.
Much like most other Countries in Europe, the United Kingdom too has embraced vat or value added tax as a system for avoiding double taxation on goods and reducing tax leaks. In case your current taxable sales exceed £70,000 pounds in the past 12 months you’ll be able to apply for vat registration and turn a vat registered dealer. This move will enable you to receive a vat number that will have to be mentioned in each vat invoice which you issue to your customers. This vat invoice will also have to mention the vat rate charged and your vat returns too will need to mention all applicable vat rates and amounts in greater detail.
Currently, the UK has 3 vat rates as decided by the hm revenue and customs department or the hmrc. The standard vat rates are 17.5% which is slated to increase to 20% from January 4, 2011. You will thus need to issue tax invoices with the new standard rates from January 4, 2011 onwards and also file your vat return based on the new vat rates. The lower vat rate of 5% is slated to remain similar to well as the zero vat rate. Vat exempt rates and classifications too are slated to stay the same. In order to be on the safe side, you should however, ask your vat agent or consultant to remain glued to all alterations in uk vat in addition to eu vat rules, particularly if you import services or goods from member EU countries that follow vat.
Come January 4, 2011 and the vat threshold limit, and also the flat rate vat scheme limit too will be changed to incorporate the change in standard vat rates. However, in case you have already paid vat on goods and services abroad before these were imported to the UK then you’ll be in a position to request vat reclaim by filling out the requisite vat form. In case of any doubts you could visit the hmrc vat website whilst utilizing various vat online services provided by the department. Several other eu countries too have either raised or intend to raise vat rates in the near future as many countries had offered special rates to tide over the economic slowdown.
It’s thus important that you clearly comprehend the implications of increased vat rates on your own business before, during and after the alternation in vat rates. This should help you to file your vat returns correctly while also charging revised vat rates to the customers. You may anyway also disclose any errors that may have already been committed through the transition period to the hmrc department and also make necessary adjustments in your next vat return as per them.
The increase in standard vat rates from 17.5% to 20% from January 4, 2011 will result in a marginal increase in costs. However, this variation will also have to be reflected in coming vat returns and calculations. You should make it a point to be aware of all about the increase in hmrc vat rates within the coming year so that your business has a seamless transition into the New Year.