The VAT rate is going back up to 17.5% on 1 January. At least, it's scheduled to go back up to 17.5% - there's a school of thought that says it might be raised higher, as a tax-raising measure. I can't see it myself, I don't think another tax hike affecting poor and rich alike will go down well in an election year. We'll have to wait and see.
In any case, there are some opportunites for a bit of VAT planning around the rate change. If you're selling to VAT registered businesses, they won't be fussed if you charge them 15% or 17.5% as they can reclaim the VAT anyway. But if you're dealing with customers who *can't* reclaim the VAT - like private individuals or many charities - then it might well be desirable to charge them 15%, not 17.5% - either because you'll lower your price to them, or you'll keep the gross price the same but be able to give less to the taxman and keep more yourself.
If so, then in most cases, if your customer agrees, you can invoice them in December, not January, fixing the VAT rate on the invoice at 15%. There are some specific rules to prevent "abusive" early invoicing - in particular, on sales of more than £100,000 - but for many small businesses it's very workable. Give us a call or email if you'd like to discuss it.
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