There are two important changes to VAT which take effect on 1 January 2010.
Change in VAT Rate
The standard rate of VAT has changed from 15% to 17.5% from today. If you have goods priced up for sale at VAT inclusive process (ie including 15% VAT), you will need to recalculate the output tax. If you do this on a retail ‘margin’ scheme, contact your accountant, as the calculations may not be as straightforward as they seem. Your margin on an item with a selling price (including VAT) of £1 is currently based on a net sales price of 87p, but after the change, this will be 85.1p.
Change in Place of Supply Rules
The place of supply rules for the supply of services abroad have changed from today. If you supply services to foreign customers, especially consulting services, you may be affected. See the HMRC website for further information.