HMRC: Be prepared for VAT rise, retailers told

Thursday, 16 December 2010 12:00

Businesses have been urged not to leave their preparations for the change in VAT until the last minute.

The tax will increase from 17.5 per cent to 20 per cent on January 4th.

Jim Harra, director of VAT at HM Revenue & Customs, said the necessary changes to accounting and book-keeping systems, including invoicing, should be ready to be rolled out well in advance of this date.

He added that retailers will also have to reprogram their electronic tills to ensure the correct levy is applied on sales.

Mr Harra noted that while the 20 per cent duty will apply to all standard-rated takings on or after January 4th, payments received once the deadline has passed for goods taken away or delivered prior to the change should still use the 17.5 per cent rate.

Consumers who are unsure if they have been charged the right amount should contact the vendor for clarification, he commented.

According to research by Sainsbury's Finance, British shoppers intend to bring forward £53 billion worth of planned purchases in order to beat the VAT rise.

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