Pre Budget Statement - Value Added Tax

As previously announced, the standard rate of VAT reverted to 17.5% from 1 January 2010.

Traders using the Flat Rate Scheme for Small Businesses should note that, as part of the Pre-Budget package, HMRC have published a revised table of flat rate percentages for use from the same date. It must be emphasised that this does not simply reinstate the percentages in use before the temporary 15% rate came into force in December 2008 – for example, the flat rate for ‘Retailing food, confectionery, tobacco, newspapers or children’s clothing’, which was 2%, rises to 3.5%, and that for ‘Post Offices’, which was 2%, becomes 4.5%. However, some other percentages have moved downwards – for example, the flat rate for ‘Computer repair services’, which was 11% before the temporary 15% rate came into force, and 10.5% from December 2008 to December 2009, became 9.5% from 1 January 2010.