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Changes to VAT Regulations
On January 1st 2010 the UK VAT rate returned to 17.5% having been reduced to 15% on 1st December 2008.
Please be aware that all SecureTrading invoices issued after January 1st 2010 will reflect the higher rate.
How does this VAT increase affect your business?
The VAT rate was reduced in an attempt to boost spending in the recession. And if recent figures are anything to go by it seems to have worked. The Centre for Economics and Business Research (CEBR) estimates that the 13-month tax cut helped boost consumer spending by £6.8bn. However, the British Retail Consortium (BRC) says it has had a "very limited effect".
Not all retailers, however, have chosen to implement the VAT increase straight away. Some retailers have delayed passing on the higher rate, while others say they will absorb the cost of the increase.
All retailers must use the 17.5% VAT rate for all takings received on or after 1st January. However, if a customer pays after 1 January for something they took away (or you delivered) before 1st January, your sale took place before 1 January and you should use the 15% rate.
For advice on how the VAT change applies to you see The Business Link’s website or the HM Revenue & Customs website.
