In 2010 three major changes to VAT will be introduced.
1. VAT rate
On 1 January 2010 the standard rate of VAT reverts to 17.5 per cent.
2. VAT registered businesses
The VAT rules for businesses who:
- supply services to or receive services from overseas businesses
- supply goods to other EC countries
- reclaim VAT incurred in another EC country
also change and where, how and when VAT is accounted for, completion of EC Sales Lists and reclaiming VAT incurred in another EC country are all affected.
You must consider now whether the changes affect you and what you need to do to prepare for them.
3. VAT filing and payment arrangements
Under Government proposals, from 1 April 2010 the way some businesses file their VAT returns and pay any VAT due will also change:
- all VAT registered businesses with a turnover of £100,000 or more (excluding VAT)
- all businesses newly registering for VAT, whatever their turnover
must file their VAT returns online and pay any VAT due electronically.
If your business falls into either of the above categories, the changes apply to all returns covering accounting periods beginning on or after 1 April 2010 and we will no longer issue paper returns for these periods.
Filing returns on paper will still be an option for the remaining VAT registered businesses, but this will be reviewed in the run up to 2012.
Follow this link for more information http://www.hmrc.gov.uk/employers-bulletin/bulletin33/majorchanges.htm