VAT reduced to 15%

[TheFaQQer]

Effective next Monday folks.

We'll need to see what happens to FRS rates.

The percentages applicable to the flat rate scheme for small businesses
are set out in regulation 55K of the VAT Regulations 1995/2518. These
will be amended by secondary legislation which will have effect from
1 December 2008. The new table of rates is reproduced in a
supplementary document, “VAT - Change in the standard rate: A detailed
guide for VAT - registered businesses”, that has been published today on
the HM Revenue & Customs (HMRC) website.

Looks like they will be making the changes for FRS.

[gingerjedi]

But those in the "Labour Only" rate of 13.5% actually have to pay out more VAT than they receive on invoices!

Eh? Invoice for 17.5% (now 15) and pay out 13.5%... I think??

[Alan @ BroomeAffinity]

Anybody found anything about income shifting in the PBR? I'm at page 87 and my head hurts.

[Pinto]

Eh? Invoice for 17.5% (now 15) and pay out 13.5%... I think??

15% VAT of £1000 = 150

When Calculating Flat Rate, You need to add the VAT, and then calculate the 13.5% so....

1000 + 15% = 1150 * 13.5% = 155.25

[kryten22uk]

Eh? Invoice for 17.5% (now 15) and pay out 13.5%... I think??

You pay out 13.5% of the figure gross of VAT.

So if you bill £1, then with 15% VAT you receive £1.15. but you must pay the govmt 13.5% of this £1.15 (NOT 13.5% of £1), and hence you owe £0.155.

Hence you take a VAT loss of 0.5pence.

...but this is all irrelevant as they are reducing the flat rate VAT too.

[TheFaQQer]

Here's the new FRS rates:

Accountancy or book-keeping                                                     11.5
Advertising                                                                      8.5
Agricultural services                                                            7
Any other activity not listed elsewhere                                          9
Architect, civil and structural engineer or surveyor                            11
Boarding or care of animals                                                      9.5
Business services that are not listed elsewhere                                  9.5
Catering services including restaurants and takeaways                           10.5
Computer and IT consultancy or data processing                                  11.5
Computer repair services                                                        10
Dealing in waste or scrap                                                        8.5
Entertainment or journalism                                                      9.5
Estate agency or property management services                                    9.5
Farming or agriculture that is not listed elsewhere                              5.5
Film, radio, television or video production                                      9.5
Financial services                                                              10.5
Forestry or fishing                                                              8
General building or construction services*                                       7.5
Hairdressing or other beauty treatment services                                 10.5
Hiring or renting goods                                                          7.5
Hotel or accommodation                                                           8.5
Investigation or security                                                        9
Labour-only building or construction services*                                  11.5
Laundry or dry-cleaning services                                                 9.5
Lawyer or legal services                                                        12
Library, archive, museum or other cultural activity                              7.5
Management consultancy                                                          11
Manufacturing that is not listed elsewhere                                       7.5
Manufacturing fabricated metal products                                          8.5
Manufacturing food                                                               7
Manufacturing yarn, textiles or clothing                                         7.5
Membership organisation                                                          5.5
Mining or quarrying                                                              8
Packaging                                                                        7.5
Photography                                                                      8.5
Post offices                                                                     2
Printing                                                                         6.5
Publishing                                                                       8.5
Pubs                                                                             5.5
Real estate activity not listed elsewhere                                       11
Repairing personal or household goods                                            7.5
Repairing vehicles                                                               6.5
Retailing food, confectionary, tobacco, newspapers or children’s clothing        2
Retailing pharmaceuticals, medical goods, cosmetics or toiletries                6
Retailing that is not listed elsewhere                                           5.5
Retailing vehicles or fuel                                                       5.5
Secretarial services                                                             9.5
Social work                                                                      8
Sport or recreation                                                              6
Transport or storage, including couriers, freight, removals and taxis            8
Travel agency                                                                    8
Veterinary medicine                                                              8
Wholesaling agricultural products                                                5.5
Wholesaling food                                                                 5
Wholesaling that is not listed elsewhere                                         6

Linky - it's in Annex E

[kryten22uk]

-already answered, so deleted-

[TheFaQQer]

IT Consultancy drops to 11.5%

Management consultancy drops to 11%

Accountancy drops to 11.5%

[Moscow Mule]

Eh? Invoice for 17.5% (now 15) and pay out 13.5%... I think??

13% of the VAT inclusive total.

I think you'd still make a profit even if it was 15% & 13% - but as it is, b/doomed.

[grey_lady]

Where did you get 13.5% flat rate vat from? i pay 13% for 'computer and IT consultancy or data processing' http://vatreadyreckoner.hmrc.gov.uk/


In other news NI is to go up 0.5% but the 1% corp tax increase planned for April isnt happening. They give with one hand take with the other...