2008 PRE-BUDGET REPORT

CHANGES TO THE STANDARD RATE OF VAT

You are probably aware that the Chancellor, in his pre-budget report on 24 November 2008, announced a decrease in the standard rate of UK VAT from 17.5% to 15%.

This is a temporary reduction in the VAT rate that comes into effect on 1 December 2008.  The rate will increase again to 17.5% on 1 January 2010.

It is important that you charge the correct amount of VAT from 1 December 2008.  This may necessitate having to change VAT rates on any computer software package (or perhaps electronic tills) that you may have.  In addition, if you account for VAT using the flat rate scheme, your flat rate scheme percentage may also have changed.

Please find enclosed a copy of a guide for VAT-registered businesses issued by HM Revenue & Customs.  You may already have received a copy of this from the VAT office.  This guide explains the new rules in more detail.

If you require any further information please contact either Stephen McCartan or Phyllis McKeeman at this office.