Changes to VAT rates from 1 April 2022

Many in the hospitality sector were hoping that the Chancellor would extend the 12.5% reduced rate that has applied since 1 October 2021 but, as scheduled, the rate has reverted to 20% from 1 April 2022.

The increase will apply to hospitality, visitor attractions and catering services including restaurants and takeaways.

This has a consequential effect on the VAT Flat Rate Scheme percentages from 1 April 2022 as set out below (flat scheme percentage rates from 1st April 2022):

• Catering services including restaurants and takeaways:12.5%
• Hotel or accommodation: 10.5%
• Pubs: 6.5%

Affected businesses should ensure that their pricing policies and internal systems and processes are updated for the 1 April 2022 change in VAT rate. Please talk to us if you need any assistance with your VAT affairs.

Changes to Accounting for VAT on Imports for Users of Flat Rate Scheme

There are important changes from 1 June 2022 for small businesses using the Flat Rate Scheme who are importing goods and using postponed VAT accounting.

Those businesses using the Flat Rate Scheme must currently add the value of imported goods to the total of all their supplies before they carry out the scheme calculation.

For VAT return periods starting on or after 1 June 2022, they should no longer include import VAT accounted for using postponed VAT accounting in their flat rate turnover. The VAT due on any imports should be added to box 1 of the return after completing the Flat Rate Scheme calculation.

HMRC have issued the following updated guidance:

Complete your VAT Return to account for import VAT - GOV.UK (https://www.gov.uk/guidance/complete-your-vat-return-to-account-for-import-vat#if-you-use-a-vat-accounting-scheme)

Importers not using the VAT Flat Rate Scheme

HMRC have also updated their guidance for VAT registered importers not using the Flat Rate Scheme:-

Complete your VAT Return to account for import VAT - GOV.UK (https://www.gov.uk/guidance/complete-your-vat-return-to-account-for-import-vat)

These traders must account for postponed import VAT on their VAT returns for the accounting period which covers the date they imported the goods. The normal rules apply for what VAT can be reclaimed as input tax and the trader’s monthly statement will contain the information to support their claim.

HMRC is aware of the problems some importers are having when trying to access their monthly VAT statements. If you cannot access your statement or you’re having problems when viewing your statement, you should follow the guidance on how to complete a VAT Return if you’re having problems with your monthly statements (https://www.gov.uk/guidance/complete-your-vat-return-to-account-for-import-vat#access).

As long as you take reasonable care to follow the guidance, there will be no penalty for errors.

VAT Flat Rate Scheme

New VAT flat rate percentages from 15th July 2020 until 12th January 2021 have been announced, which include: 

• Catering 4.5%

• Pubs 1%

• Hotels and accommodation 0%

See more information here: https://www.gov.uk/vat-flat-rate-scheme/how-much-you-pay

May 2019 Tax Tips & News

Welcome...

To May's Tax Tips & News, our newsletter designed to bring you tax tips and news to keep you one step ahead of the taxman.

If you need further assistance just let us know or you can send us a question for our Question and Answer Section.

We are committed to ensuring none of our clients pay a penny more in tax than is necessary and they receive useful tax and business advice and support throughout the year.

Please contact us for advice in your own specific circumstances. 

We're here to help!

May 2019

· Taxpayer wins IR35 challenge
· Minimum workplace pension contributions rise
· VAT Flat rate scheme
· Rent-a-room tax break remains
· May questions and answers
· May key tax dates
 

May 2017 Tax Tips & News

Welcome... To May's Tax Tips & News, our newsletter designed to bring you tax tips and news to keep you one step ahead of the taxman. If you need further assistance just let us know or you can send us a question for our Question and Answer Section. We are committed to ensuring none of our clients pay a penny more in tax than is necessary and they receive useful tax and business advice and support throughout the year. Please contact us for advice on your own specific circumstances. We're here to help! May 2017 · Automatic enrolment for pensions · Tax-free savings update · HMRC launch consultation on employee expenses · VAT Flat rate scheme: changes take effect · May questions and answers · May key tax dates

January 2017 Tax Tips & News

Welcome... To January's Tax Tips & News, our newsletter designed to bring you tax tips and news to keep you one step ahead of the taxman. If you need further assistance just let us know or you can send us a question for our Question and Answer Section. We are committed to ensuring none of our clients pay a penny more in tax than is necessary and they receive useful tax and business advice and support throughout the year. Please contact us for advice on your own specific circumstances. We're here to help! January 2017 · Changes to the VAT flat rate scheme · Abolition of Class 2 NICs · Company cars: ultra-low emissions vehicles · Disguised remuneration and the self-employed · January questions and answers · January key tax dates