VAT 17.5% confusion

jefflemon

Hi,

I worked about 15 days for someone last month, I need to invoice them this month, Im VAT registered, what VAT rate should i charge, 15% as that was the rate when i did the work, or 17.5% as thats the rate now when im invoicing them.

Thanks

dehaani

17.5%, the rate when the bill is raised.

tehone

the invoice date (tax point) is the date that determines the VAT rate

moneypooh

curious, but why are you not invoicing them for the time you actually did the work?

McAzrael

You decide. See section 3.2 here: http://www.hmrc.gov.uk/vat/forms-rates/rates/rate-rise-guidance.pdf#sec21

JasonLVC

jefflemon wrote: »

Hi,

I worked about 15 days for someone last month, I need to invoice them this month, Im VAT registered, what VAT rate should i charge, 15% as that was the rate when i did the work, or 17.5% as thats the rate now when im invoicing them.

Thanks

The VAT change rules allow the supplier to split the VAT between the old and new rate based upon what work you did in December and what work you did in January so if you did all the work in December and you are billing in January then you invoice at 15%.

If customer is VAT registered then no big deal for the custoemr either way as they'll likely be reclaiming it anyway, but if the customer is not VAT registered or unable to recover the VAT, then the 2.5% makes a big difference.