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Relaxation on VAT increase

Issue 33 - December 2009

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Businesses that stay open past midnight on New Year’s Eve are not expected to increase the rate of VAT on sales from 15% to 17.5% until they close or 6am on 1 January 2010, whichever is the later. This will include pubs, restaurants, clubs and telecoms companies. It will not apply to businesses that account for VAT on the basis of VAT invoices issued or to mail order or online retail sales. HMRC has published a customs brief outlining the detail of the ‘period of grace’ and has further details on its website on implementing the rate increase.