Value Added Tax

From	1 Jan 2010	1 Dec 2008
Standard rate	17.5%	15%
VAT fraction	7/47	3/23
Reduced Rate	5%	5%
Taxable Turnover Limits
Registration - last 12 months or next 30 days over	£70,000 from 1 April 2010
Deregistration - next 12 months under	£68,000 from 1 April 2010
Annual accounting scheme	£1,350,000
Cash accounting scheme	£1,350,000
Optional flat-rate scheme	£150,000

Change of standard rate and impact on flat rate scheme

The standard rate of VAT returned to 17.5% from 1 January 2010. The flat rates were amended on 1 January 2010 to take account of this change.

Tour Operators’ Margin Scheme

From 1 January 2010, some amendments have been made to the Tour Operators’ Margin Scheme to ensure full compliance with EU law.

Partial exemption

From 1 April 2010 the basis on which businesses calculate the amount of VAT they can recover will be simplified.

Option to tax

From 1 April 2010 amendments will be made to simplify the option to tax regime.

Switching to VAT online services

Those with an annual turnover of £100,000 or more (exclusive of VAT) on 31 December 2009 will be sent a letter from HMRC. This letter will explain that VAT returns must be submitted online and paid electronically for all returns starting on or after 1 April 2010. There will be a guide with the letter, which explains how to register and enrol for VAT online services. The requirement to submit VAT returns online and pay electronically also applies to those who register or should have registered for VAT on or after 1 April 2010, regardless of turnover.