Breaking News - UK VAT Rate change to 15%
UK VAT is being reduced to 15% from 17.5% effective 1st December 2008. A new UK VAT code is available called VAT15 which can be used for the 13 month period that the rate will be in place.
See the FAQ below about managing the new VAT 15% changeover.
UK VAT System
The UK operates a VAT system like many EU countries. There are four main VAT codes in operation that Saasu supports as a Beta trial. There are two Standard Rates. 17.5% for transactions up to and including 30 November 2008 and also 15% for transaction from 1st December 2008 up to and including 31st December 2009.
UK VAT Rates
| Name | Rate% | Examples | More Info |
|---|---|---|---|
| Standard 17.5% | 17.5% | General Goods and Services | Up to 30th November 2008 |
| Standard 15% | 15% | General Goods and Services | From 1st December 2008 |
| Reduced | 5% | Childrens car seats. Domestic use fuel and power. | Reduced Rate Info from HMRC |
| Zero | 0% | Childrens clothes, books, food etc. | Zero Rate Info from HMRC |
FAQ’s
How do I manage the 2008 UK VAT rate change?
- Enter transactions for the 30th November 2008 and before using the VAT rates that you have been using up until now, as per normal.
- At close of business 30th November 2008 change your Chart of Accounts default tax codes to use the new VAT15 tax code. To do this go to Accounts > and then use the edit icon to open your Account codes one by one and change the default tax code if set. This will ensure that Point of Sale transactions entered will default to the new Tax Code if you are using a USB device or fast keying POS transactions. You can always manually change the code but this step will help with accuracy.
- From 1st December 2008 start using the VAT15 tax code for standard VAT rate transactions. Check you first few transactions are working correctly if you haven’t pre-tested transactions.
- When you complete balancing your accounts for 30th November 2008 deactivate the old VAT code for 17.5% by clicking the minus icon next to it (Go to Settings > Main > manage tax Codes). You will keep it deactivated for 13 months or until the government advises the next change.
- Do some sanity checks, make sure you are happy with the changes.
How do I complete a VAT return?
HMRC’s How to complete and file a VAT return has specific information. Saasu is a software company so we can’t avise you how to complete returns and remittances for government authorities.
