Changes to VAT – Especially FRS!

Another improvement to our accounting software based on feedback from our customers:

As no doubt you’re aware, the standard rate for VAT in the UK is dropping to 15% as from Monday. No changes were needed to the software to deal with this. If your default rate is currently 17.5%, then when you wake up Monday morning it will have changed to 15%.

The bigger issue that most other software vendors seem to be overlooking is with the Flat Rate Scheme. The rates for FRS are also changing on Monday. Unless you’re lucky enough to have your VAT period end on 30th November then your next VAT Report will have to be calculated in two parts – the first part at  the old (current) rate, and the second part (on and after 1st December) at the new lower rate.

As you’d expect, we’ve made it easy for you.  All you need to do is click the VAT Settings button under Reports –> VAT Management & Reports.

You’ll see the box where you have your rate and below that another box for the previous rate. All you’ll need to do for your next VAT report is enter your new rate in the main box, and your old (higher) rate in the second box provided. We’ll take care of the rest for you.

If your VAT period ends on 30th November, then this won’t be an issue for you this year – but it will be next year as the VAT rates are supposedly returning to normal on 1st Jan 2010. Needless to say, we’ll be here to help then too.

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