by Iain Wilson
The 20% VAT increase will be upon us in January. If you're running a business, you should make sure you're ready now.
First of all, most ecommerce systems will be able to change the VAT rate easily, just make sure you know that is the case.
Secondly, it's perhaps self-evident, but another 2.5% of your gross income from product sales is going off to the government. It may be that you're happy to take the hit to your income or you may decide that you need to review and change your pricing.
Your ecommerce system will likely allow you to change your product/service prices, so you can go through each product, one by one, checking and changing if necessary. If you don't have too many products, then this is probably manageable. However, if you have hundreds or thousands of products, then it becomes a little more work.
Perhaps what you should consider is an accross the board increase for all products. This doesn't need to be a fixed rate increase; it could be a percentage increase, with rounding up to a nearest factor. In these cases, you should be talking to your web company - they will be able to advise on what can and can't be done.
Did you know it's possible to 'bank' at the lower VAT rate even though the date of supply is after 4th January 2010? Well, you can if you make sure the tax-point of the transaction is before 4th January.
To find out what this means and for even more information, have a look at this VAT article from our friends at Springfords Accountants.comments powered by Disqus