As we brace ourselves for an increase in VAT, Maximillion’s Finance Manager Ramu explains how to prepare for the change and save the 2.5% increase:
In his 2010 Emergency Budget the Chancellor announced an increase in the standard rate of VAT from 17.5% to 20% effective from 4 January 2011. As our services are continuous, i.e. we make a single supply of a service which is carried out over a period which commences before 4 January 2011 but is not completed until after that date, then Maximillion can raise a VAT invoice at the 17.5% rate.
To benefit from this saving, your event which is to be held after the 4th January 2011 will need to be contracted in November or December with payment made before 4 January 2011. The advantage of saving 2.5%, against the drawback of paying earlier than you might otherwise have done, would need to be considered.
If you are thinking of organising an event in early 2011, please send us a message or provide us with details via our online enquiry form, and we can help plan the finances to your benefit.
Please refer to the following link for further information & guidance.http://www.hmrc.gov.uk/vat/forms-rates/rates/rate-rise-guidance.pdf