With the New Year came the much publicised VAT increase from 17.5% to 20%. One thing that hasn’t been as well publicised is the actual date that it took place, namely 4th January. It seems to have been missed by most of our suppliers and partners who have billed us on 1st January at the new 20% rate.
With Nigel on his annual trip to the ‘motherland’, I have spent a bit of time overseeing our accounts function. And I have been surprised at the general lack of knowledge around the subject, especially as it affects all our businesses. Maybe it is an issue for government not giving adequate notifications by downplaying the significance. So I wonder how many man hours will be lost because of companies incorrectly billing.
Overall it should be relatively straightforward with billing software able to take the change and update accordingly. We should all be used to it anyway from changing it down to 15% and then back up again to 17.5% a few years ago during the crunch. That time however the change did occur at the beginning of the month, so maybe confusion is understandable and next time changes such as this should always be brought in at the beginning of any given month.