Temporary VAT Reduction

Posted in Good Advice, Taxation, Uncategorized, VAT

From 1 September 2020, a six month reduction in the standard rate of VAT from 23% to 21% will apply.

Please use the time between now and September 1st to ensure that you have identified and prepared for any necessary changes to your accounting and sales systems. This may include, but is not limited to, changes to cash register tills/ electronic point of sale of sales systems (EPOS) and/or web based online sales/ordering systems and/or sales invoicing systems and/or product databases.

In general, goods and services supplied before 1 September 2020 are liable to VAT at the rate in place at the time of supply, usually 23%.

However where goods and services are supplied in August 2020 by a trader who is obliged to issue a VAT invoice and that trader issues the invoice after 31 August 2020, the rate in place in September of 21% applies.

Any VAT credit note or debit note relating to a supply of goods or services, which contains a VAT adjustment, should show VAT at the rate in place at the time the original invoice was issued. For example, if goods are supplied in August 2020 and a credit note is issued in September 2020 (due perhaps to an adjustment in the price of the goods or services), the rate of VAT on that credit note is 23%. This is because the goods or services were supplied when the rate of VAT was 23%.

Leave a Reply