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Short Notice VAT Change? No problem!

By Ed Molyneux on Tuesday 25 November 2008

Changes to UK VAT

Photo Credit: Agência Brasil Licensed under Creative Commons Attribution 2.5 Brazil

In yesterday's Pre-Budget Report, seen as historic by many, UK Chancellor Alastair Darling announced widespread changes to many areas of the public finances.

Of some concern, because of the short-notice given, is the 13-month temporary reduction of the standard rate of VAT from 17.5% to 15%. The new rate comes into effect on the 1st of December, only 6 days after the announcement.

A potential administrative nightmare in the making! Unless, that is, you've stepped into the world of online accounting tools like Kashflow, Xero or of course our very own FreeAgent!

OK, so we're not dealing with the intricacies of retail pricing and cash sales to consumers, but all the same we're working hard to make sure our users - primarily service-based business owners - have an easy life next Monday.

Our next bite of crisp accounting freshness - "Pouilly-Fuissé" - will be deployed on Sunday 30th Nov and include full support for the new rate, including our usual automatic handling of VAT invoices & purchases and support for the new Flat Rate Scheme rates.

To take advantage of the revised software, you'll need to:

Check the advice here if your invoices cover work that spans the 1 Dec 2008 changeover date, ensuring you set the VAT rate accordingly.
Er...
That's it.

There. That wasn't so difficult was it?

Over to you...

Andrew

Posted on : Tue November 25, 2008

Great to hear you're on the case.

I had to chuckle when I heard of the VAT rate cut - it's been 17.5% for what, twenty years? The number of systems and speadsheets out there that were written assuming VAT is 17.5% forever more... :)

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