Retail businesses need to be aware the standard rate of VAT on goods and services will revert to 17.5% from 1 January 2010.
The timing of this change is obviously not ideal for retailers as it falls in the middle of the busiest trading period of the year. There are a number of administrative issues for retail businesses to deal with before the increase comes into effect.
From 1 January 2010 retailers should alter their VAT accounting processes so that they account to HMRC for output tax at the correct rate and claim credit for input tax at the correct rate. If retailers intend to pass the VAT standard rate increase on to their customers, tills should be adjusted to charge VAT at 17.5% or goods should be re-priced. Procedures for dealing with VAT on refunded goods, which usually peak after Christmas, should also be put in place.
Businesses requiring further information on the VAT rate change or any other business law issues can call our free legal helpline 0800 9758091 to speak with one of our specialist business lawyers.