VAT Standard Rate Change

In his pre-budget speech the Chancellor announced that the standard rate of VAT will be reduced from 17.5% to 15% from Monday 1st December.

Implementing this change in Businessware is very straightforward particularly if you are using the Standard or Cash Accounting schemes. Simply follow the instructions below :

1) Open Businessware and select the File menu.
2) Select System Setup from the menu.
3) Click on the VAT Control tab.
4) Change the VAT Rate 1 box from 17.5 to 15 and click Save & Close.

This is all you need to do. If you are part way through a VAT quarter your transactions before the 1st December will be retained at 17.5% and from the 1st at 15%.

Please note : If you are using the Flat Rate Scheme you must also implement this change.

Flat Rate Scheme (FRS)

The rate change also involves changes to the industry sector rates for the Flat Rate Scheme. Support was introduced in Businessware for the FRS in August and if you are using this scheme with the software there will be some changes necessary.

If your VAT quarter ends on the 30th November then the change is very straightforward. Simply complete your VAT return at the current industry rate before 31st December as usual.

If the rate change occurs in the middle of your VAT quarter then you will be required to account for transactions before 1st December at the old flat rate and those on or after the 1st at the new flat rate.

To cater for this we will be producing a table containing the new industry sector flat rates and an update to the software which deals with the split. While any changes in producing a VAT return to cater for the new flat rates will be not be required until January, we will be endeavouring to provide these change as soon as possible.

For more information on the VAT rate change on the HMRC web-site Click Here