Budget 2014 – VAT

Thresholds

The VAT registration threshold and deregistration thresholds will each increase by £2,000. This will leave the registration threshold at £81,000 and the deregistration threshold at £79,000.  Both increases will take effect from 1 April 2014.

New motor vehicle scale charges will also be effective for return periods beginning on or after 1 May 2014, and can be found here: www.hmrc.gov.uk/vat/forms-rates/rates/rfsc-2014.pdf

 

Prompt Payment Discounts

The VAT treatment of prompt payment discounts is to be brought into line with EC legislation.  At present, a supplier who offers a prompt payment discount can account for VAT on the sales price less the prompt payment discount, regardless of whether the customer takes the discount up or not.

From April 2015, when a customer doesn’t take up the prompt payment discount VAT will have to be accounted for on the full selling price.

The introduction of the new rules is being accelerated for businesses which provide broadcasting and telecommunication services and who don’t have to provide a VAT invoice to their customers. These businesses will have to follow the new rules from 1 May 2014.

Businesses which currently offer prompt payment discounts should start looking at their systems to make sure they can comply with these new rules once introduced.

 

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Jan 18

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I have been with Dodd & Co since I started my business in 2004 and have always been impressed with their professional, yet friendly service. They are calm, organised and have a great manner. My business is only small, but I still feel important and they always try to help me get the most out of my finances. As Market Sense has developed I have come to really value and rely on their input – they take the pain and hassle away from the VAT and HMRC and they have given me great advice on developing for the future. I have referred clients who are also very pleased with the service – and the afternoon tea at Penrith Show is much appreciated!
-- Tracey Errington