If you have a running business in the United Kingdom or plan to start one you then should know everything about the increase in hmrc vat rates from the vatcontrol.com/vat coming year. This will help you to quickly incorporate all the necessary modifications to your vat invoices and vat returns, and enable you to carry on running your business without any interruptions.
Much 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 in the past Yr then you can apply for vat registration and turn a vat registered dealer. This move will allow you to receive a vat number that will have 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 as well as your vat returns too will have 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 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 similar to well as the zero vat rate. Vat exempt rates and classifications too are slated to stay 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 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 to the UK then you will be able to ask for vat reclaim by filling out the requisite vat form. In case of any doubts you can always visit the hmrc vat website while also utilizing various vat online services offered by the department. Several other eu countries too have either raised or plan to raise vat rates in the future as numerous countries had offered special rates to tide over the economic slowdown.
It’s thus important that you clearly comprehend the implications of increased vat rates on your business before, during and following the alternation in vat rates. This should help you to file for your vat returns correctly while also charging revised vat rates to the customers. You may anyway also disclose any errors that might have been committed during the transition period to the hmrc department and also make necessary adjustments in your next vat return as per them.
The increase in standard vat rates from 17.5% to 20% from January 4, 2011 will result in a marginal increase in costs. However, this variation will also have to be reflected in coming vat returns and calculations. You should make it a point to know all about the increase in hmrc vat rates within the coming year so your business carries a seamless transition into the New Year.