If you have a running business in the UK or plan to start one you then should know all about the rise in hmrc vat rates from the https://vatcontrol.com/vat coming year. This should help you to quickly incorporate all of the necessary changes in your vat invoices and vat returns, and help you to carry on running your business without 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. If your current taxable sales exceed £70,000 pounds in the past Yr then you can apply for vat registration and turn into a vat registered dealer. This move will allow you to receive a vat number which will need to be mentioned in each vat invoice that you issue to your customers. This vat invoice may also have to mention the vat rate charged as well as 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% that is slated to raise to 20% from January 4, 2011. You will thus have to issue tax invoices with the new standard rates from January 4, 2011 onwards as well as file your vat return in line with the new vat rates. The lower vat rate of 5% is slated to stay the same as well as the zero vat rate. Vat exempt rates and classifications too are slated to stay exactly the same. In order to be on the safe side, you need to however, ask your vat agent or consultant to stay glued to all changes in uk vat as well as eu vat rules, especially if you import goods or services 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 include the modification in standard vat rates. However, in case you have already paid vat on products or services abroad before these were imported to the UK then you’ll be in a position to request vat reclaim by completing the requisite vat form. In the case of any doubts you can always go to the hmrc vat website whilst utilizing various vat online services provided by the department. Other eu countries too have either raised or intend to raise vat rates in the future as numerous countries had offered special rates to tide over the economic recession.
It is thus important that you clearly understand the implications of increased vat rates on your business before, during and after the alternation in vat rates. This will help you to file your vat returns correctly while also charging revised vat rates to your customers. You may anyway also disclose any errors that might have already been committed during the transition period to the hmrc department and also make necessary adjustments within your next vat return as per them.
The increase in standard vat rates from 17.5% to 20% from January 4, 2011 will lead to a marginal increase in costs. However, this change will also have to get reflected in coming vat returns and calculations. You should make it a point to know everything about the increase in hmrc vat rates within the coming year so your business has a seamless transition to the New Year.