20% VAT rate guidance for UK customers
Presumably egged-on by the ease with which online accounting software handled the last two VAT rate changes on-the-hoof, the UK Government will again change the standard rate of Value Added Tax on 4 January 2011, this time raising it to 20%. Sorry about that.
We’ve written up some Help advisory notes which should cover most things from a Xero perspective, and there’s a bunch of technical guidance from HMRC if you need it. It’s also advisable to check with an accounting professional if you’re particularly unsure about something – if you don’t have a Xero friendly accountant, you could take your pick from one in our Partner Directory.
To recap what Xero will do automatically:
- update default tax rates
- update repeating invoices
- make bank reconciliation functions date aware
What Xero won’t do:
- accounts receivable draft or awaiting approval invoices
- accounts payable draft or awaiting approval invoices
- unsubmitted or pending expense claims
- draft manual journals
- update the tax on Repeating Transactions with adjusted VAT
So, be sure to review the above items and:
- check the correct VAT tax rate is used
- check tax rates on draft documents
- review repeating invoices
At least this year you can have a wee drink to bring in 2011 before having to worry about sitting down and checking off your VAT changes for January 4.