The standard rate of VAT will be reduced from 17.5% to 15% for the period 1 December 2008 to 31 December 2009. The rate will then revert to 17.5%. No changes have been made to the 5% reduced rate or the 0% rate.
The government will introduce ‘anti-forestalling legislation’ to prevent abuse of the reduction in the standard rate of VAT.
The percentages applicable to those businesses operating the flat rate scheme will be reduced with effect from 1 December 2008.
The transition to the new rate will cause issues for all businesses. We have provided a link to HMRC guidance but please do get in touch if you would like some help in this area.
We are also including HMRC’s guide for consumers, so you are aware of how the changes will impact you personally.
Source: HMRC VAT changes HMRC detailed guide HMRC consumer guide