The government recently announced its July Stimulus Package, a range of measures designed to support businesses and mitigate the economic effects of COVID-19. One of these measures is a temporary reduction in the standard rate of VAT from 23% to 21%, effective from 1 September 2020 until the end of February 2021.
It is important that businesses update their systems for these changes and are familiar with the rules that determine the applicable rate of VAT. Critical to this will be whether you account for VAT on an invoice or cash receipts basis, and also whether your customer is VAT-registered or not.
If you require assistance with any tax requirements or challenges you face as a result of the pandemic, please contact a member of the tax team.