Standard VAT rate is back to 17.5%
The temporary reduction in the standard rate of VAT to 15% ceased on 31 December 2009. From 1 January 2010 the standard rate has reverted back to 17.5% and all businesses that charge VAT at the standard rate have been affected.
Businesses that use the VAT fraction should also ensure that they are using 7/47ths as a basis for separating the net and VAT elements of a total (gross) price. There have been no changes to the reduced (5% rate) and zero VAT rates.
There are special rules for sales that span the change in rate and for the continuous supplies of services. There are also special rules relating to deposits received before 1 January 2010 for sales made after the rate change.
Businesses using special schemes such as the cash accounting scheme, annual accounting scheme and the flat rate scheme must also ensure that they correctly account for VAT bearing in mind how the rate change affects the use of the schemes.