VAT Rates

With effect from I January 2010, the standard VAT rate is increased from 15% to 17.5%. Businesses must remember to incorporate the new VAT rate into their existing bookkeeping software so that the correct amount of VAT is accounted. In addition, sale invoice issued to customers must also include the correct VAT rate.

The VAT for reduced rate has not changed, it is still at 5%.

The VAT registration threshold is currently £68,000 from 1 May 2009. Businesses must be aware that if their annual sales for the last twelve months or next 30 days are expected to exceed this amount, they must register for VAT with HM Revenue and Customs as soon as possible.

Some businesses may decide to de-register for VAT for one reason or another. The de-registration limit is £66,000 from 1 May 2010.

VAT registered businesses are entitled to opt for either annual accounting scheme or cash accounting scheme if their sales are up to £1,350,000.

VAT flat rate scheme limit remain unchanged at £150,000.

VAT on fuel for private use in cars

Where businesses wish to reclaim the input VAT on fuel which has some degree of private use, they must account for output VAT on a scale charge.

The table shows the VAT chargeable for quarters commencing on or after 1 May 2009. The last two columns take account of the change of the standard rate of VAT from 15% to 17.5% with effect from 1 January 2010.

Quarterly VAT

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