Emergency Budget 22 June 2010: Change in the standard VAT rate from 4 January 2011
22nd June 2010
The standard rate of VAT will be increased from 17.5% to 20%. This will apply to any supply made on or after 4 January 2011. It will also apply to any acquisition or importation that take place on or after that date. A detailed guide for traders has already been released, explaining how the change will operate.
A guidance note has also been issued, describing legislation which it is intended will cancel out a tax advantage in certain cases where a trader:
- receives a payment or issues a VAT invoice before 4th January 2011 for goods or services to be provided on or after that date, or
- grants rights or options before that date to receive goods or services after that date.
It is intended that the legislation will be narrow in scope. As a result it is not likely to affect many businesses.
