Know all about the rise in hmrc vat rates in the coming year
If you have a running business in the UK or intend to start one you then ought to know everything about the increase in hmrc vat rates in the coming year. This will help you to quickly incorporate all of the necessary modifications to your vat invoices and vat returns, and enable you to keep on running your enterprise without any interruptions.
Just like most other European countries, the UK too has embraced vat or value added tax to be a system for avoiding double taxation on goods and reducing tax leaks. In case your current taxable sales exceed £70,000 pounds during the past 12 months you’ll be able to make an application for vat registration and turn into a vat registered dealer. This move will enable you to obtain a vat number that will need to be mentioned in each vat invoice that you issue to the 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 United Kingdom has 3 vat rates as decided by the hm revenue and customs department or hmrc. The regular vat rate is 17.5% that is slated to raise 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 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 remain https://vatverification.com exactly the same. To be on the safe side, you need to however, ask your vat agent or consultant to stay glued to any or all alterations in uk vat in addition to eu vat rules, especially 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 will be changed to incorporate the modification in standard vat rates. However, for those who have already paid vat on products or services abroad before these were imported into the UK then you will still be able to request vat reclaim by completing the requisite vat form. In the 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 plan to raise vat rates in the near future as numerous countries had offered special rates to tide over the economic recession.
It is thus important that you clearly comprehend 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 charging revised vat rates to the customers. You may anyway also disclose any errors that may have been committed through the transition period to the hmrc department and even make necessary adjustments in your next vat return as specified by them.
The rise in standard vat rates from 17.5% to 20% from January 4, 2011 will result in a marginal rise in costs. However, this variation will also have to be reflected in coming vat returns and calculations. You need to make it a point to be aware of all about the rise in hmrc vat rates within the coming year so that your business carries a seamless transition to the New Year.