This post outlines the latest treatment of VAT as highlighted in yesterday’s budget.
The VAT registration threshold will rise from £77,000 to £79,000 and the deregistration threshold will increase from £75,000 to £77,000, both from 1 April 2013.
DON’T FORGET: Flat rate VAT. Flat rate VAT could simplify your VAT and save you tax if your pre-VAT turnover is not more than £150,000 a year.
VAT fuel scale charges will increase from 1 May 2013 in line with fuel prices.
Consumer supplies of telecommunications, broadcasting and e-services will be taxed in the EU member state in which the consumer is located from 1 January 2015. From that date, businesses will be able to register for VAT in the UK only and account for VAT due in other member states using a single return (‘Mini One Stop Shop’).
SAVER: You can still save VAT by shopping overseas. Goods purchased from the Channel Islands with a value of less than £15 are no longer VAT free. However, if you order your CDs, DVDs, contact lenses, from elsewhere outside the EU, e.g. Switzerland or Hong Kong, the VAT exemption still applies.
Manufacturers will be able to reduce their VAT payments to take account of refunds they make directly to final consumers. The change will follow consultation during 2013.
From a date to be announced, zero-rating will be extended to sales of goods to businesses that are registered for VAT but are not established in the UK and export the goods to a non-EU destination.