UK Vat Rate Increases Beginning 1 January 2010

VAT rate in the UK will increase to 17.5% beginning 1 January 2010.

On 1 December 2008, the standard rate of Value Added Tax in the United Kingdom has been temporarily reduced to 15%, leaving the 5% reduced VAT rate (i.e. for power and fuel) and the zero rate intact. The VAT exemptions were also not effected by the change.

VAT rate on goods or services in the UK will revert to its original value of 17.5% beginning 1 January 2010. Therefore, businesses in the UK will issue VAT invoices on goods and services at the reverted rate of 17.5% after that date.

For services which started before the VAT change but finished after 1 January 2010, taxpayers may choose to invoice the part of the work until 1 January 2010 at the reduced VAT rate of 15%, and the remaining part at 17.5%.

Read more about UK Taxation.