1. The important date is 4 January 2011!
2. The new VAT fraction will be 1/6.
3. Check out the new VAT rates for businesses using the Flat Rate Scheme.
4. Take advantage of the change of rate supply rules for supplies spanning the rate change.
5. Consider pre-payments where possible if you are exempt/charity.
6. Entry and exit levels for payement on account will be adjusted to reflect new VAT rate.
7. Finalise VAT bearing property transactions before 4/1/11 to avoid paying more SDLT.
8. Deferment guarantees need to be increased for additional import VAT – consider applying for SIVA?
9. Even fully taxable businesses need to plan for additional payments. You’ll need more to pay for good/services ordered now but delivered in 2011. Review your bank facilities to ensure that you’ve got sufficient funds to meet additional VAT throughput.
10. If you’re buying new cars for the business, take delivery before 4/1/11 to avoid the rise.
11. Remember to change invoicing procedures so that your system automatically charges 20%. from 4/1/11 and calculates VAT on inclusive figures at 1/6.
12. Invoices for services supplied over the change of rate can be apportioned so that the services performed before 4/1/11 are charged at the 17.5% rate.
And – unlucky for some – bonus tip number 13! If you want to know how to increase VAT inclusive prices (eg for a retailer) on standard rated sales, you need to increase the price by add 1/47th of the current sales price.