FURTHER GUIDANCE ON SUPPLIES MADE ON OR NEAR 4 JANUARY 2011

The rate at which you should charge VAT will depend upon the date of the supply, and in certain circumstances, on the nature of the supply.

Retailers:

• For goods paid for and delivered on or after 4 January 2011, charge 20% VAT.
• For goods paid for on or after 4 January 2011, but delivered before 4 January 2011, charge 17½% VAT.

Wholesalers and business suppliers:

• For goods invoiced and delivered on or after 4 January 2011, charge 20% VAT.
• For any goods paid for and delivered before 4 January 2011, charge 17½% VAT - the invoice date is irrelevant.

Service providers

• For services completed and invoiced by 3 January 2011, charge VAT at 17½%.
• For services completed by 3 January 2011, but not invoiced until on or after 4 January 2011, charge VAT at 20%. WE DO NOT RECOMMEND THAT YOU DELAY RAISING AN INVOICE TO VAT REGISTERED CUSTOMERS.
• For continuous supplies, account for VAT at the rate applicable on invoice or receipt of payment, whichever is the earlier.
• For payments received on account (already invoiced, but in advance of the supply of services), you will already have accounted for VAT at 17½%. You can opt to re-invoice these at 20%. However you will then need to issue a credit note, and possibly refund the difference - WE RECOMMEND THAT YOU ONLY DO THIS IF YOUR CUSTOMER CANNOT RECOVER VAT.