The forthcoming rise in VAT is something that every business has to be prepared for. This is especially the case if you are registered for VAT and you have to prepare a VAT return on a regular basis for the taxman.
If this describes your situation you should start to explore the ramifications of the forthcoming VAT rise now, rather than leaving everything until the last minute. This preparation will make the actual transition a lot easier to manage, because you will know exactly what has to be done and when you have to do it by.
If you are still feeling in the dark about the rise, don’t worry. The ideal place to go to is the HMRC website, where they have lots of information about the move. The 4th January 2011 is the date on which the switch will be made, so you still have a few months to familiarise yourself with the new 20% rate as it will apply to your business.
For instance you need to know the difference between goods and services that have the standard rate of VAT applied to them and those that don’t. Some items are not rated for VAT at all, so if you happen to sell any of these you don’t have to worry. They will not be changed when the 4th January comes around.
As you can see, knowing which items will be changed in price will help you to manage those changes when the time comes. The more time you have to prepare and to know what you have to do, the better it will be and the more seamless the switchover will be as well. Why panic over something that is inevitably going to happen, when a few months of preparation can stop that panic from taking place altogether?
Aside from the HMRC website (and of course taking the advice of your accountant if you have one) there are also a myriad of other professionally run websites that deal with all matters pertaining to business, including VAT. A lot of these have useful articles that are worth reading as well, so be sure to check them out.
We shall also be covering news and views regarding the forthcoming increase as and when things happen. In the end businesses in the UK have a big change coming up and whether you are rated for VAT or not, you will still notice the change come into effect.