Budget 2009 – VAT Changes

VAT changes to modernise cross border trading will be introduced over a 3 year period from 1 January 2010 and will include;

• Changes to the place of supply rules for cross border supplies of services.
• Changes to the time of supply rules for cross border supplies of services
• Completion of quarterly EC Sales Lists.
• A new electronic VAT refund procedure for cross border supplies of services.

The temporary rate of 15per cent will cease on 31 December 2009, and the standard rate of VAT will return to 17.5 per cent from 1 January 2010. Legislation will be introduced to counter schemes which purport to apply the temporary rate after 31 December 2009.

A reduced rate of VAT of 5% will apply to children’s car seat bases from 1 July 2009 (in line with the rate that already applies to children’s car seats).

The registration threshold for VAT will rise to £68,000 from 1 May 2009.