VAT group

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VAT Unplugged – major changes to VAT accounting in 2010

There may well be three months of shopping days until Christmas, but businesses should be prepared for a
number of changes in the VAT accounting system that will bring in the New year.

Key points to note in your diary are:

ƒ Change of VAT Rate – the VAT rate will change back to

17.5% on 1 January 2010. Plan so that your business is
compliant and look at the opportunities that the changes
January 2010 may present.
M T W T F S S
1 2 3 ƒ Delivering international services – EC Sales Lists (ESL)
4 5 6 7 8 9 10 will need to be completed for businesses providing services to
11 12 13 14 15 16 17 business customers in the EU.
18 19 20 21 22 23 24
25 26 27 28 29 30 31 ƒ Buying International services – when buying international services for business
purposes you will need to account for VAT under the reverse mechanism – that
means entering the appropriate VAT amount for output tax and recovering the
appropriate amount of input tax on the VAT return.

ƒ Supplying goods to other EU countries – ESLs now to be submitted within 14 days

for paper returns and 21 days for electronic returns.

ƒ Refund of VAT paid in other EU Member States – Claim back

VAT via form on UK Government Gateway rather than to
Member State involved.

ƒ VAT Returns to be done on-line – from 1 April 2010, all businesses with a turnover
of £100,000 will have to file VAT returns electronically. This will give the advantage
April 2010
of having an extra 7 days to file the return and pay electronically. Make sure that this
M T W T F S S
is set up well in advance as this is a particularly busy time for accessing the HMRC
1 2 3 4
5 6 7 8 9 10 11 Gateway.
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19
13
20
14 15 16
21 22 23
17
24
18
25
ƒ Correction of errors – It is already possible to correct errors on the VAT return. (The
greater of £10,000 of 1% of turnover subject to an upper limited of £50,000). From
26 27 28 29 30
1 April 2010, the new time limit for claims for overpaid VAT and payment of under
declared VAT is 4 years.

September 2009
M T W T F S S For further information
If you would like any further information, on the contents of this briefing or on any other
VAT related issues, please contact Sandra McLean, on 0161 214 7500 or
TODAY sandra.mclean@horwath.co.uk
Horwath Clark Whitehill LLP
Arkwright House
Parsonage Gardens
Manchester M3 2HP

www.horwathcw.com

This guidance is published without responsibility on the part of Horwath Clark Whitehill for loss occasioned to any person acting or refraining from action as a result of any
information contained therein. © Horwath Clark Whitehill LLP September 2009