Posted by AccountsPortal Jon on 17 December 2010
On the 4th of January 2011, the standard rate of VAT will change from 17.5% to 20% in the UK.
In addition to the existing rates, the 20% rate will shortly be available for invoices, recurring invoices, credit notes and bank transactions.
Please check the HMRC website (http://www.hmrc.gov.uk/vat/forms-rates/rates/rate-increase.htm) for specific information on how to manage invoices raised after 4 January 2011 relating to sales/services provided prior to this date. The HMRC also explains how to manage VAT on sales/services provided before and afer this date that are billed on a single invoice.
If you are registered on the Flat Rate Scheme, then you will need to create a new VAT Status before you start entering data. More information on the new VAT thresholds are available on the HMRC website: http://www.hmrc.gov.uk/vat/start/schemes/flat-rate.htm#2.
We will automatically make the following changes at midnight on the 3rd of January 2011:
You can, of course, change any of the above items yourself prior to the 4th of January if you wish.