VAT rate changes to 15%

Well, here it is – the announcement in the Pre-Budget Report of the VAT rate being reduced to 15%. The first VAT rate change since 1991, if I’m not mistaken. Personally, I don’t see it making a big difference to the man in the street but it will have an effect on many businesses, unfortunately only from an administrative point of view. Changing computer systems, re-pricing goods on shelves and trying to find good answers to when or how the VAT rate should be applied to work in progress. These all have to be done, and it is unfortunate that my first anecdotal experience of how the VAT Office are dealing with it is not good. A client had received a VAT leaflet about the change through the post on Wednesday morning, couldn’t really understand it, but he needed assurance that what he thought it said was correct. Phoned the VAT Office National Helpline, and was told something contradictory. Upon pointing this out, he was transferred to another operative, who gave him a third different answer. How is the average businessman supposed to deal with that? Hmmm.

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