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Emergency Budget 2010 - VAT

The main changes announced today are:

  • As expected the standard rate of VAT will increase to 20% on 4 January 2011. Anti-forestalling legislation has been announced to prevent any widescale planning.
  • There are no changes to the current zero rates. The flat rate scheme percentages will be increased in line with the increase to the standard rate of VAT.
  • The standard rate of Insurance Premium Tax will increase by 1% to 6%. The higher rate will increase by 2.5% to 20%.
  • Previously announced changes to the zero rating of certain types of aircraft.
  • Previously announced changes to the place of supply of certain types of natural gas and heating/cooling systems.
  • Previously announced changes to the use of the Lennartz principle for certain types of asset used for business/private use.
  • Previously announced changes to the VAT exemption for certain public postal services provided by the Royal Mail with effect from 31 January 2011. Stamped mail remains exempt so private individuals should be largely unaffected.

 

 

Date: 22nd June, 2010
Author: Jane Stacey

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