08 November 2009
Last year’s surprise reduction in VAT to 15% was always intended to be temporary. As a result we all know about (and this time can actually prepare for) the increase back to 17.5% from 1 January 2010.
Invoices for work already performed dated before the increase should charge VAT at 15%. Invoices can be issued on account charging VAT at the lower rate providing payment is not deferred by more than six months.
Prepayments less than £100,000 can secure VAT at 15% even where the invoice is subsequently issued in January assuming the services or product is not artificially split into a number of payments below this limit.
Phil Salmon
director of VAT services | 020 7969 5611
psalmon@haysmacintyre.com
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