Reminder: VAT rises to 20% on Jan 4, 2011

[Edwin]

VAT is set to rise to 20% on January 4, 2011. This may present an opportunity for you to complete sales that are a bit "stuck" as it provides an extra spur to the buyer to complete before their costs go up.

It also makes it worthwhile to sit down and do a bit of math on renewals, see how far ahead you can get - anything billed before 4 January will be at the old VAT rate, after all.

Finally, it makes it very important to get all drop catching bills for December settled promptly, since anything invoiced and paid for after Jan 4 will be at the higher rate.

 

[foz]

Surely for people VAT registered it's not a biggie?

 

[rob]

True - however money is money. Real life example where selling name over 3 years on split payments:

> March 2011 - £5k+vat
> March 2012 - £5k+vat
>
> vat on £5k @ 17.5% = 875
> vat on £5k @ 20% = 1000

Instead I am (hopefully) getting the full wodge in a week or twos time. The above with something else on top means the buyer saves £650 in total, which is enough to make them want to do it.

It can make a difference

 

[retired_member21]

It's annoying if your accounts aren't up to date, as in Quickbooks (for instance) have to change the default VAT rate and have to be very disciplined if you are putting in payments/invoices prior to that date which need to be restored back the the 17.5%

Up to date accounts = ok, but behind (like me ) = can be annoying

 

[norwethel]

Look on the bright side: it's easier to work out in your head now....

 

[bensd]

It also makes it worthwhile to sit down and do a bit of math on renewals, see how far ahead you can get - anything billed before 4 January will be at the old VAT rate, after all.

For those who are not VAT registered, it could be quite a saving doing it early. Especially since you can renew 6 months advance.