The standard rate of VAT is currently 17.5 per cent but will be increased to 20 per cent on 4 January 2011.

For any sales of standard-rated goods or services that you make on or after 4 January 2011 you must charge VAT at the 20 per cent rate. If you have a cash business and calculate your VAT using the VAT fraction you must use the VAT fraction of 1/6 on your standard-rated VAT inclusive sales from 4 January 2011.

The change only applies to the standard VAT rate. There are no changes to sales that are zero-rated or reduced-rated for VAT. Similarly, there are no changes to the VAT exemptions. Any sales you make at these rates are unaffected by this change.

For those businesses on the Flat Rate VAT Scheme the new rates can be found on the following website.

HMRC VAT Increase

This entry was posted on Wednesday, December 1st, 2010 at 1:08 pm and is filed under VAT. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.