On 4th January 2011 there are some changes to VAT, the big change being the standard rate moving from 17.5% to 20%.
KashFlow customers are used to having the hassle taken out of their accounting jobs, the VAT change is no exception. Thankfully we’ve been here before with the change from 15% to 17.5% at the beginning of this year, so I can pretty much copy and paste from our blog on the subject last year:
Change to Standard Rate of VAT
The standard rate of VAT will change from 17.5% to 20%. If you’re VAT registered then a message should be showing on your Overview page which to take you to a page where you can click a single button and have your account added to the list of accounts that we’ll automatically apply the changes to. If you’re on this list then the following changes will take place automatically for you at midnight on 3rd Jan
– If you don’t currently have 20% in your list of VAT rates then it will be added
– All repeat invoices, purchases or bank transaction templates set to 17.5% will change to 20%
– If your default VAT rate is currently 17.5% it’ll be changed to 20%
– Any Sales Types or Outgoing Types you have set to a default rate of 17.5% will change to 20%
– If you use the PayPal Importer service and have the VAT rate set to 17.5%, this will be changed to 20%
The data you’ve already entered wont be changed.
Changes to percentages on the Flat Rate Scheme
If you’re on the Flat Rate Scheme then the percentage VAT you pay may be changing. You can change this rate in Settings -> VAT Settings.
Where you’ll have fun is if the period you’re producing a VAT return doesn’t start on 1st Jan. In this scenario you’d have to pay the old rate on sales prior to 4th Jan and the new rate on sales on or after 4th Jan
KashFlow makes this very easy. If you tick the box in VAT Settings to say you’re on the FRS then you’ll see the settings to deal with cross-over periods like the above.
If you’ve got any questions at all on the above, the please do email the support team.