VAT changes

[Inactive]

you can never find an accountant when you want one. 

[Rik]

My own instinct is that, despite your quote, Ted, the tax point on the invoice will determine VAT rate, but we need Sebby or Lance to be definitive. OTOH, calling IDNet after Christmas would be the quickest way.

[Ted]

You're probably right Rik, like i say i'm no accountant. TBH i don't see it as an issue with IDnet as it really is only pennies, although as Simon mentioned earlier it would be interesting to know what will happen for people that have made substantial purchases of goods and services, that they have paid for but won't receive until after 1st December.

I know what my common sense tells me should happen but, that's not always a term you can use in conjunction with certain government agencies. 

[davej99]

The rules seem clear to me but I am not an expert.

Goods and services received after Dec 1st attract vat at 15%. Therefore, if advance payment has been made, including vat at 17.5%, the supplying company is empowered, but not required, by legislation to credit the customer with the difference in vat relating to the portion of goods and services supplied after Dec 1st.

When the refund is issued, the difference in vat charged is deducted from the current sum due to HMRC and there is no penalty to the supplier.  For supply to a vat registered business it makes no difference to them as well. For supply to a non-vat registered person or business it makes about 2% of a difference. There is no penalty to the supplying company, either way, other than time and effort, however, it is down to them.

It seems common sense to refund on request, customers who have paid in advance on a monthly contract, and are non-vat registered. Those customers have the option to cancel and get a full refund anyway. There is no point in refunding all customers automatically because this creates pointless vat accounting for the company and for vat-registered customers.

Therefore HMRC appear to be doing the "common sense" thing and it is all down to the supplying company and good customer relations.

[Rik]

And more pain for the traders.

[Ann]

I may email them after Chrimbo to ask about it.  Just because you've all got me interested to know now.

[Simon_idnet]

Don't forget that, though the VAT rate change may have cost you a few pence more this year, by the same token you will gain next year.
S

[Rik]

Happy Christmas, Simon.

[Simon_idnet]

Cheers, and you!
S