HMRC urges preparation for VAT rise

Date: 16th December 2010

Small businesses operating across the UK could be encouraged to seek the advice of a specialist tax accountancy service following a recent reminder from HM Revenue & Customs (HMRC).

The department has urged enterprises to be prepared for the rise in VAT, which sees the rate increase from 17.5 per cent to 20 per cent on January 4th.

Jim Harra, director of CT and VAT at HMRC, said: "With the Christmas and New Year holidays almost upon us, businesses must be ready to implement the increase to the standard rate of VAT.

"Don't leave it until the last minute to make any necessary changes to your book-keeping and accounting systems including invoicing and tills. You also need to make sure your staff are fully aware that the new 20 per cent rate must be charged from January 4th."

The department explained that if a business receives a purchase invoice dated on or after January 4th, which shows the VAT at 17.5 per cent, only the actual amount shown can be reclaimed.

Posted by Jacob Williams