VAT Rate Increase
During the 2010 Budget the Chancellor announced an increase in the standard rate of VAT to 20% with effect from 4 January 2011. This allows adequate time for business, particularly retailers, to make any changes to pricing, point of sale and accounting systems to deal with the new rate. To combat any unreasonable attempts to reduce the burden of the increase HMRC have also announced anti forestalling legislation which will block any prepayment planning arrangement which does not meet normal commercial practices. Exempt, partly exempt and nonprofit making organisations who are unable to recover all of the VAT on their costs may still wish to review whether there are any short term commercially viable VAT savings to be made within these rules.