“The new VAT rate of 20% will come in to effect on 4 January 2011. Following hot on the heels of two recent VAT rate changes, businesses should at least be up to speed with the practicalities of VAT implementation. If not, they have got six months to learn the rules and prepare for it,” said Marcus Ward, VAT Director at Price Bailey Chartered Accountants.
He added: “Everyone will be affected by this, although in different ways. Hardest hit will be businesses that are not VAT registered and those that make exempt supplies, as their irrecoverable VAT will increase. If you are in one of these categories you will need to review your budgets and business model.
Ward added: “You won’t be surprised to know that there is anti avoidance legislation to prevent those trying to avoid the higher rate with contrived planning.”
Anti avoidance
The Budget contained the usual array of weapons to counter the structured tax avoidance industry. For most taxpayers this is irrelevant as it is only those with a high risk appetite that go near such planning.
However some of the measures are more broadly directed at tax collection. Expect more pressure to pay your taxes on time, every time.
The Chancellor’s plans for tackling the UK deficit are now well under way.Price Bailey’s free budget report uncovers some of the key measure as well as the less publicised changes that are most likely to affect your business or your personal finances.
To receive a copy of the Budget Report or to speak to a professional adviser please contact Price Bailey on 0800 434 6460 orThis email address is being protected from spambots. You need JavaScript enabled to view it.
