In case you have a running business in the United Kingdom or intend to start one you then should know all about the increase in hmrc vat rates in the http://vatcontrol.com/vat coming year. This should help you to quickly incorporate all the necessary changes in your vat invoices and vat returns, and enable you to carry on running your enterprise without any interruptions.
Much like other European countries, the UK 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 Yr then you can apply for vat registration and turn into a vat registered dealer. This move will enable you to obtain a vat number that will have to be mentioned in each vat invoice that you issue to your customers. This vat invoice will 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 detail.
Currently, the United Kingdom has 3 vat rates as decided by the hm revenue and customs department or hmrc. The standard vat rate is 17.5% which 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 similar to well as the zero vat rate. Vat exempt rates and classifications too are slated to remain the same. In order to be on the safe side, you need to 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 the flat rate vat scheme limit too might be changed to include the change in standard vat rates. However, in case you have already paid vat on products or services in another country before they were imported into the UK then you’ll still be able to request vat reclaim by filling out the requisite vat form. In the case of any doubts you can always visit the hmrc vat website while also utilizing various vat online services offered by the department. Other eu countries too have either raised or intend to raise vat rates in the future as many countries had offered special rates to tide over the economic recession.
It’s 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 for your vat returns correctly while also charging revised vat rates to the customers. You can anyway also disclose any errors that may have 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 rise in costs. However, this variation will also have to get reflected in coming vat returns and calculations. You need to make an effort to be aware of everything about the rise in hmrc vat rates in the coming year so your business carries a seamless transition into the New Year.