INCREASE IN STANDARD RATE OF VAT FROM 21% TO 21.5% - W.E.F. 1 DEC. 2008
Traders accounting for VAT on the invoice basis
Apply VAT at the rate in force when the invoice issues (or should issue) except..
Transactions with private individuals - apply the rate in force at the time of the supply.
Traders accounting for VAT on the cash basis
Account for VAT at 21% on goods / services supplied before 1 December, regardless of when payment is received.
Account for VAT at 21.5% on goods and services supplied on or after 1 December 2008.
Fixed interval payments (e.g payment due for q/e 31 December 2008)
Vatable at the 21% if payment due and invoiced before 1 December 2008.
Vatable at 21.5% if payment due or invoiced on or after 1 December 2008.
Credit / Debit notes
To VAT registered/exempt traders, or public bodies - apply VAT at the rate in force at the time original invoice issued.
To unregistered persons - apply VAT at the rate in force at the time of supply.
Advance payment, (including a deposit), received from a VAT registered person - vatable a 21% if payment due and invoiced before 1 December 2008 - vatable at 21.5% if payment due or invoiced after 1 December 2008.
Advance payments received from unregistered persons - vatable at the 21% if received before 1 December 2008 and 21.5% if received on or after that date.
Traders should bear in mind when completing their VAT return for the Nov/Dec 2008 taxable period that they must account for VAT at the rates appropriate to the particular months.
When completing the Return of Trading Details for the year the same row should be used for both the old and the new rates.