All About VAT Increase

All about the VAT Increase VAT and how it affects you 23 % What was the increase? The standard rate of VAT increased from 21% to 23% with effect from 1 January 2012 What is affected? All goods and services currently subject to the rate of 21% will be affected. This includes but is not limited to: vehicles, consumer goods, hiring/leasing, confectionery and services like accountancy, advertising, haulage, telecom- munications, toll roads etc. What is unchanged? This increase doesn't affect to the zero rate, the 13,5% reduced rate or the 9% approved in June 2011 2012 23% Credit Notes 21% Credit notes issued after January 2012 must show 2011 invoice the VAT at the rate of the original invoice was issued (invoices in 2011, 21%) 21% nvoices If you issued an invoice in 2011 but it is not paid until 2012, the VAT rate payable is that which applied in 2011, 21%. Contracts Contracts existing on 1 of January 2012 and not completed until after that date will need to be adjusted unless there is agreement to the contrary between the parties. VAT cash accounting Businesses on the cash basis of accounting for VAT (VAT cash accounting) that make supplies before 1 January 2012 but receive payments on or after 1 of January will apply 21% to those supplies. Only supplies made after 1st of January will be at 23% rate.