Businesses that issue VAT invoices

You must use the 17.5 per cent rate for all VAT invoices that you issue on or after 1 January 2010. But see our section below on special rules for sales that span the change in rate.

Sales that span the change in rate

There are special rules for sales which span the change of rate. If you provide goods or services before 1 January 2010 and raise a VAT invoice after that date you can choose to account for VAT at 15 per cent. You don’t need to tell HMRC if you do this.

Services you start before 1 January 2010 but finish afterwards

If you start work on a job before 1 January 2010 but finish afterwards you may account for the work done up to 31 December 2009 at 15 per cent and the remainder at 17.5 per cent. If you choose to do this you will have to be able to demonstrate that the apportionment is fair.

Continuous supplies of services

If you provide a continuous supply of services, such as leasing of photocopiers, you should account for the VAT due whenever you issue a VAT invoice or receive payment, whichever is the earlier. You must charge 17.5 per cent on invoices you issue and payments you receive on or after 1 January 2010. You may, if you wish, charge 15 per cent on the services you’ve provided in the period up to 31 December 2009 and 17.5 per cent on the remainder. If you choose to do this you will have to be able to demonstrate that the apportionment is fair.

For further information please contact us on 0845 330 4031