Free advice on the VAT change from VAT expert

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There’s only a couple of weeks until the 4th January when the UK VAT rate is due to change fro 17.5% to 20%. This is going to cause a number of complications for online sellers, as when completing your VAT return you’ll have to account for two separate VAT rates for transactions which occur in the same month.

You also need to be aware that if you use the Cash Accounting Scheme for small businesses that sales made before 4th January 2011 remain taxable at 17.5%, even when payment is received on or after 4th January 2011. You’ll need to track all payments during the month (and possibly for the next couple of months if you have late payments) and determine if they relate to sales with 17.5% VAT or sales with 20% VAT.

You’ll also have to account for the difference in VAT rates for any refunds you make as some may relate to 17.5% and others will be at the new rate of 20%.

To help you get to grips with the VAT changes Martin Dane, VAT Principal at BDO, the UK member of the world’s fifth largest accountancy organisation, will be helping small businesses by answering questions and offering business VAT advice on eBay’s Online Business Forum on LinkedIn, next Wednesday 15th December at 2pm.

Martin has worked for BDO for 12 years, and his experience in VAT dates back to 1978 when he joined Customs on leaving school. Martin works with a wide range of businesses from multi-nationals to SME’s and has particular specialist experience in online and high street retail, warehousing and logistics and online services, including gaming and e-supplies.

If you have any VAT questions and would like answers from the expert then make sure you log in tomorrow, or post your question in advance.

One Response

  1. Be nice if Mr Dane could come here and give some advice to those approaching the VAT threshold (from either end) too.


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