VAT was due to revert to 17.5% at midnight, but businesses that would have been open at the time – particularly pubs and clubs where people may be celebrating the New Year – would have faced the difficult task of adjusting their prices mid-way through the night.
Graham Purvis from Robson Laidler LLP said “The concession will also apply to telecommunications companies, which may bill for calls and text messages at the reduced rate until 6am.
Some businesses will not be allowed to take advantage, including mail order or on-line retailers and businesses that account for VAT on the basis of invoices issued. Also excluded are pre-payment for goods or services to be provided after 6am on 1 January, takings from vending machines and transactions that would be caught by the existing anti-forestalling rules surrounding the rate change”.
HMRC has also stated that the concession may be withdrawn or restricted in other cases, where its use was not considered appropriate or necessary.
Notes to editors
For more information contact Graham Purvis of Robson Laidler LLP: Direct Line 0191 2818191, Email gpurvis@robson-
These comments are offered for publication on the understanding that our contact information is included.
The writer would appreciate details of the publication date if this article is released for publication.
