If your business is VAT registered don’t forget that the standard rate will change on 1 January 2010. It was reduced to 15% in December 2008 in an effort to boost consumer sales but will rise to 17.5% again as soon as the calendar turns to 2010.
The date of the change could mean headaches for businesses hoping to be busy with New Year sales. To avoid last-minute problems, ensure you are fully prepared for the change well in advance.
The basic rules are that you need to apply the 17.5% rate to your prices from 1st January, and if you issue VAT invoices, you must charge the new rate on all invoices raised on or after that date.
As with most tax rules, there are a number of exceptions for circumstances that do not fit neatly into the main guidelines. For example, owners of clubs and restaurants who are planning New Year’s Eve parties will be pleased to know there are special arrangements for businesses that will be trading before and after midnight on 31 December 2009.
If you are unsure about any aspect of the change contact HM Revenue & Customs or your bookkeeper as soon as possible.