Increase in the standard VAT rate
The standard rate of VAT was temporarily reduced to 15 per cent on 1 December 2008. It returned to 17.5 per cent on 1 January 2010.
For any sales of standard-rated goods or services that you make on or after 1 January 2010 you must charge VAT at the rate of 17.5 per cent. If you have a cash business and calculate your VAT using the VAT fraction you must revert to the VAT fraction of 7/47 from 1 January 2010.
The change only applies to the standard VAT rate. There are no changes to sales that are zero-rated or reduced-rated for VAT. Similarly, there are no changes to the VAT exemptions. Any sales you make at these rates are unaffected by this change.
For more details on how the changes may affect your business, do not hesitate to contact CAO or visit the HMRC website.