Member Article

Region’s firms urged to prepare for VAT

BUSINESSES in the region are being reminded to start preparing for next month’s VAT rises now.

From 4 January 2011, all standard-rated goods and services will carry a VAT charge of 20 per cent.

For cash businesses that work out VAT using a fraction, the new figure will be 1/6.

Robson Laidler LLP, accountants, are advising that by ordering goods in advance businesses could delay the effects of the tax hike.

Graham Purvis fromRobson Laidler,said “The new rate applies for all takings received on or after 4 January.

“Payments on or after 4 January for goods or services delivered prior to that date will be deemed to have occurred before the changeover and the old 17.5 per cent rate will still apply.”

In addition, firms that supply good and services before the 4 January but issue the invoice after that date can still apply the 17.5 per cent rate.

While a business that issues an invoice before the January 4 may choose between the different rates, even if the goods arrive after that date.

This was posted in Bdaily's Members' News section by Ruth Mitchell .