If you have a running business in the UK or intend to start one you then should know everything about the rise in hmrc vat rates in the vatcontrol.com/vat 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 interruptions.
Much like other European countries, the United Kingdom too has embraced vat or value added tax to be a system for avoiding double taxation on goods and reducing tax leaks. If your current taxable sales exceed £70,000 pounds during the past 12 months then you can apply for vat registration and turn into 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 your customers. This vat invoice will also have to say 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 the hmrc. The regular vat rate is 17.5% that is slated to increase to 20% from January 4, 2011. You will thus have 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 reduced vat rate of 5% is slated to remain similar to well as the zero vat rate. Vat exempt rates and classifications too are slated to stay the same. In order to be secure and safe, you need to however, ask your vat agent or consultant to remain glued to all changes 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 also the flat rate vat scheme limit too might be changed to incorporate the change in standard vat rates. However, in case you have already paid vat on goods and services in another country before these were imported into the UK then you will be in a position to ask for vat reclaim by completing the requisite vat form. In case of any doubts you could go to the hmrc vat website while also utilizing various vat online services provided by the department. Other eu countries too have either raised or intend to raise vat rates in the future as many countries had offered special rates to tide over the economic slowdown.
It's thus essential that you clearly comprehend the implications of increased vat rates on your own business before, during and following the change in vat rates. This will help you to file for your vat returns correctly while charging revised vat rates to the customers. You can anyway also disclose any errors that may have already 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 increase in standard vat rates from 17.5% to 20% from January 4, 2011 will result in a marginal rise in costs. However, this change will also have to be reflected in coming vat returns and calculations. You should make an effort to know all about the increase in hmrc vat rates in the coming year so that your business has a seamless transition to the New Year.