Small business and tax blog

A decrease in the rate of VAT has been widely predicted for the Pre-Budget Report tomorrow, and it is possible that the change could be brought in at short notice.

Businesses selling to customers who are not VAT-registered (or to customers who are registered but not able to reclaim VAT, such as those on the Flat Rate Scheme or affected by partial exemption) should consider delaying their ‘time of supply’, or ‘tax point’, until after the VAT rate has gone down. By doing this, it may be possible to decrease the sales price at no cost to the business, or increase the profit from the sale.

Persons or businesses who are not able to reclaim VAT and who are about to incur a large cost should consider delaying that purchase until the situation becomes clearer.

The timing of a transaction for VAT purposes is unfortunately quite complicated, but it is all set out here.

We will post again when further details are available. The Pre-Budget Report is scheduled for 3:30 on Monday afternoon.

For professional help with your VAT issues, please see our VAT page.

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