Know all about the rise in hmrc vat rates from the coming year

In case you have a running business in the United Kingdom or intend to start one you then should know everything about the increase in hmrc vat rates in the https://vatcontrol.com/vat coming year. This will help you to quickly incorporate all the necessary changes in your vat invoices and vat returns, and enable you to keep on running your enterprise without interruptions.

Much like most other Countries in Europe, 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 12 months then you can make an application for vat registration and turn a vat registered dealer. This move will enable you to receive a vat number which will need to be mentioned in each vat invoice that you issue to your customers. This vat invoice may 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 UK has 3 vat rates as decided by the hm revenue and customs department or the hmrc. The regular vat rate is 17.5% which is slated to raise to 20% from January 4, 2011. You will thus need to issue tax invoices with the new standard rates from January 4, 2011 onwards as well as file your vat return based on the new vat rates. The lower 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 remain exactly the same. To be secure and safe, you need to however, ask your vat agent or consultant to stay glued to all alterations in uk vat as well as eu vat rules, especially if you import goods or services 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 will be changed to incorporate the change in standard vat rates. However, in case you have already paid vat on goods and services abroad before they were imported to the UK then you will still be in a position to request vat reclaim by completing the requisite vat form. In case of any doubts you can always go to the hmrc vat website while also utilizing various vat online services provided by the department. Several other eu countries too have either raised or intend to raise vat rates in the near 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 own 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 your customers. You can anyway also disclose any errors that might have 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 rise in standard vat rates from 17.5% to 20% from January 4, 2011 will result in a marginal increase in costs. However, this change may also have to get reflected in coming vat returns and calculations. You need to make an effort to be aware of everything about the rise in hmrc vat rates within the coming year so your business carries a seamless transition into the New Year.