Beating VAT increase?

gardening_diva

I am looking at buying a new kitchen and am wondering what the situation is regarding the VAT increase in the New Year.

I am thinking of ordering the goods & paying the deposit before the New Year, however the balance would be paid & the goods delivered after January.

Would I have to pay the new rate of VAT on the balance, or will I 'lock in' the price by paying a deposit this year?

Thanks!

I_luv_cats

I think it is the invoice date that is crucial

Equaliser123

My understanding is that the VAT is applied on the supply date. However, if you were to pay in full prior to the increase, then that would probably be fine.

darkblue_2

Iluvcats is corrected - if you are supplied with the VAT invoice before the increase, the date at the time of invoice is correct for VAT purposes.

You're not doing the company any harm in doing so. VAT is collected via businesses for HMRC.

I_luv_cats

Bring forward big purchases

The most obvious move to beat the VAT hike is to bring forward any major purchases you’re planning to make ahead of the January deadline. Be aware that any goods you order will need to have any VAT receipt raised before January 4.
In theory, this means you could in theory pay a deposit now and the balance in 2011

From love money.com

I am sure i've heard "John Whiting" tax expert on Working Lunch mention about the invoice date.

Don't HRMC tell businesses the rules n regs??

mjm3346

Bear in mind if you are spending £10,000 on the kitchen (excluding VAT), the extra VAT will be £250 and you may well be able to save more than that in the new year sales.

david39

An excellent point mjm3346 - something worth bearing in mind when we start seeing all those "Beat the VAT Increase" adverts.

gardening_diva

mjm3346 wrote: »

Bear in mind if you are spending £10,000 on the kitchen (excluding VAT), the extra VAT will be £250 and you may well be able to save more than that in the new year sales.

Good point, but the company has a 50% sale most of the year

gardening_diva

So this wouldn't fall foul of HMRC's anti-avoidance rules for VAT increases?