Major changes to VAT in 2010

In 2010 three major changes to VAT will be introduced.

1. VAT rate
On 1 January 2010 the standard rate of VAT reverts to 17.5%

2. VAT registered businesses
The VAT rules for businesses who:

• Supply services to or receive services from overseas businesses
• Supply goods to other EC countries
• Reclaim VAT incurred in another EC Country

also change and where, how and when VAT is accounted for, completion of EC Sales Lists and reclaiming VAT incurred in another EC country are all affected.

More information can be found on the HMRC website here.

3. VAT filing and payment arrangements
Under Government proposals, from 1st April 2010 the way some businesses file their VAT returns and pay any VAT due will also change:

• all VAT registered businesses with a turnover of £100,000 or more; and
• all businesses newly registering for VAT, whatever their turnover

must file their VAT returns online and pay any VAT due electronically.