Value added tax (VAT) 2011

Registration and deregistration thresholds

From 1 April 2011, the VAT registration threshold will increase from £70,000 to £73,000 and the deregistration threshold will increase from £68,000 to £71,000.

SAVER: Some small businesses may be better off operating within the VAT flat rate scheme

This considerably simplifies VAT compliance because the amount of VAT is based on a set percentage of turnover according to the business sector.

Fuel scale charges

New VAT fuel scale charges for taxing the private use of business fuel will replace the existing rates from 1 May 2011.

VAT quarterly fuel scale charges (inclusive of VAT)

Effective from 1 May 2011.

CO2 band VAT fuel scale charge, 3 month period (£)
120 or less157.00
125236.00
130252.00
135 268.00
140283.00
145299.00
150315.00
155331.00
160346.00
165362.00
170378.00
175394.00
180409.00
185425.00
190441.00
195457.00
200472.00
205488.00
210504.00
215520.00
220536.00
225 or more551.00

Where the CO2 emissions figure of a vehicle is not a multiple of five, the figure is rounded down to the next multiple of five to determine the level of charge.

Low value consignment relief

The threshold below which goods imported from outside the EU (eg from the Channel Islands) are VAT-free will be reduced to £15 (from £18) from 1 November 2011. The Government will also explore options for limiting the scope of the relief.

Business samples

VAT relief for businesses providing samples for marketing purposes will be extended to the whole of a series of samples given to any one individual or business instead of just the first sample.

Grouping

Legislation in the Finance Bill 2012 will replace an extra-statutory concession which ensures that VAT groups and businesses with overseas branches are treated equally in respect of services bought from third parties.

DON’T FORGET: VAT cash accounting

Businesses with a turnover of less than £1.35 million can choose to account for VAT on a ‘cash’ basis. This is particularly useful where the business carries a significant amount of trade debtors, because the VAT on ‘sales’ only needs to be paid over when the customer pays.

Online registration and filing

All businesses will have to file VAT returns online and pay electronically from 1 April 2012.

VAT zero-rating for printed matter

Zero-rating will be withdrawn for ancillary printed matter connected to the supply of a differently rated service

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