Corporate Headlines >

VAT reduction - how does it affect you?

The rate of VAT was reduced from 17.5% to 15%, with effect from 1 December 2008. If you were invoiced for rent (or other services) in advance, before the announcement of the rate change you may have been charged VAT at the higher rate.

If this is the case then you should ask the landlord (or supplier) to issue a credit note for the period falling after the rate change and to be re-invoiced at the lower rate.

This may apply if the date of payment was on or after 1 December 2008.

This will be of relevance if you are unable to recover VAT in full, either because you are not currently VAT registered or are partially exempt for VAT purposes.  If you are VAT registered then this change in the rate may offer you cash flow advantages.

As with all areas of VAT the rules surrounding a change of VAT rate are complex and for further information and advice, please speak to your partner at Charterhouse.