VAT on 2011 wedding?

sw_mina

The VAT rate is going up - oh no!

Our venue (march 2011) has sent us an email saying they're going to send us a revised quote for our wedding because of the hike in January.

We're going to be pre-paying in instalments. What I don't understand is whether we have to pay VAT at the increased rate for it all even though most of the money will be received by the venue before the hike date, and therefore they should only have to pass on 17.5% to the inland revenue for those invoices.

Does anyone know where we stand on this?

Thanks!

ellay864

The issue is around the fact that the current VAT rate applies ie the VAT rate at time of tax invoice but in your case if you have paid so much beforehand there should be allowance made for that. The revised quote at worst should just apply the new rate to the money paid after that date but you could always ask them to confirm that. If you're in a position to pay it all before January that would solve the problem
There is a post on here I found regarding the last VAT rise that may be helpful.
https://forums.moneysavingexpert.com/discussion/comment/27666935#Comment_27666935

sw_mina

ellay864 wrote: »

The issue is around the fact that the current VAT rate applies ie the VAT rate at time of tax invoice but in your case if you have paid so much beforehand there should be allowance made for that. The revised quote at worst should just apply the new rate to the money paid after that date but you could always ask them to confirm that. If you're in a position to pay it all before January that would solve the problem
There is a post on here I found regarding the last VAT rise that may be helpful.
https://forums.moneysavingexpert.com/discussion/comment/27666935#Comment_27666935

That's what I thought... we've yet to have the quote back but I got the impression from the venue that they were going to apply it to it all. I presume they'll argue they'll have to pay at the increased rate for the food and wine, although that's actually the minority of the money we're paying - the rest is accommodation and I can think of no costs to them which will increase with the VAT rise.

lindaatno9

I would think that as the invoice was raised now, they can't impose a rise for January. If you chose to pay the balance in full, the new vat rate hasn't come into play!

JCS1

This is my specialist knowledge area - I spend all day raising sales invoices and dealing with deposits!

Either the raising of a VAT invoice or payment creates a tax point and it is that which determines the VAT rate to be used.

A lot of companies get confused as they think it is the date of supply (it can be as well, which is why they get confused :cool:). Also a lot of accounting systems can't cope with more than one VAT rate so they go for the easy option.

If a deposit has been paid in 2010 @ 17.5% VAT, then VAT @ 20% will only be due on the balance paid in 2011.

This is what happened when it changed from 15% to 17.5%, so I'm assuming it will be the same this time though I am awaiting the nice 40+ page document that I'm expecting on HMRC website over the next few months. Once this is available, it should give you more details to 'discuss' with venues.

sw_mina

Aha - thank you. I'm glad we got it right, now let's hope the venue agrees. Very helpful to know they'll probably be a HMRC document at some point with guidance we can refer them to.

JCS1

I'll be checking the HMRC website for work in due course, I'll add this thread as a a favourite and then post back with the link and highlight the relevant sections in due course. I don't expect anything for a few months though.

lindaatno9

sw_mina wrote: »

Aha - thank you. I'm glad we got it right, now let's hope the venue agrees. .

Well I hope they do. If they feel they can impose it from immediate effect, I'll have to try that too!!
Sorry didn't mean that at all. I would assume it's from Jan and not before. You need to tell them that.

LegalBlonde

I did think boooooo the second I heard!!! i heard of it a few weeks ago at some big serious work meeting and all I could think was oh no oh no wedding!!!The venue have mentioned before that I can come in and pay bits off so going to have to clarify with them what the VAT will be but I imagine from past experience of the whole 15% thing, it will be date of invoice, therefore if you are paying in bits, the VAT on date of payment x

bubbles0169

guess when my debts are repaid? guess when i can start saving for our wedding?
jan bl00dy 2011 so i cant even try to pay bits this year!!
sorry if the pster who helped mebefore is reading this but i still cant work out how much the final bill will be in 2012
does anyone here know how to work it out assuming it will be20& VAT still?
i know you cant just add on 2.5% but what do you add on and how do you work it out?
my bill at the moment is £6500

JCS1

If your bill is £6,500 including VAT at 17.5% then your net figure will be £5,531-92, + VAT @ 20% = £6,638-30.