Change of VAT rate – 2011

The change of VAT rate is from the 4th January 2011 and the new rate is 20%.  In simple terms; You can measure the work done before midnight on the 3rd January and charge it at the old rate even on an invoice raised in 2011. You can charge the old rate on all pre-payments for work where the money is received before the 4th January 2011. You can charge the old rate on all invoices raised before the 4th January 2011, up to £100,000, for work to be undertaken after the change of rate. In the first quarter’s return period after the change of rate, do not worry unduly about invoices coming to you at what seems to be the wrong rate from another VAT registered trader. HMRC will use their light touch on the transition where no tax is lost.
If you have any queries on this please let us know.