VAT rate change and New Year’s Eve
Following a statement in Parliament earlier in the year HMRC have issued a news release relevant to businesses that will remain open past midnight on New Year’s Eve 2009.
As readers will be aware, the standard VAT rate will technically revert back to 17.5% from midnight on 1 January 2010. As a concession, businesses including pubs, restaurants and hotels will be able to continue charging VAT at the 15% rate until the end of trading of the 31 December session or 6am on the morning of 1 January 2010, whichever is the earlier. This temporary relief does not apply to businesses that account for VAT on the basis of VAT invoices issued or to mail order or on-line retail sales.
A similar measure will also allow telecommunication providers to use the 15% VAT rate for voice calls and text messages that take place and are billed up to 6am on 1 January 2010.