I guess everyone who predicted the increase in the VAT rate to 20% can give themselves a nice pat on the back and look forward to the rush of marketing campaigns at the end of the year when everyone tries to boost their sales pre-change. I am sure we will also see a myriad of companies after January 4th 2011 (the date of the increase) telling us that they will pay the extra VAT for us. Which is all well and good but does make me think they were perhaps overcharging prior to that.
As for the date of January 4th? Well, presumably that is to make things easier for the restaurant and bar trade that would otherwise have to worry about calculating the VAT on their New Year’s Eve celebratory champagne served both before and after midnight!
Aside from the VAT, other changes to the tax rates and allowances are fairly marginal for small businesses. Many of the ‘bad’ changes, such as a reduction in the capital allowances rates, will likely only affect medium to large companies whilst small companies will benefit from the reduction in the corporation tax rate.
All in all not a bad budget but I guess time will tell.
