The main implication for departments of the change in VAT rate will arise from its purchases from suppliers. Suppliers of goods and services should be amending the VAT rate on their purchase invoices in line with the guidance above.
Purchase invoices dated on or after 1 January should be at the new rate of If you received goods on or before 31 December but get invoiced after that date, say on 4 January , your supplier will probably charge VAT at In cases where the rate of VAT has been charged incorrectly on an invoice this should be highlighted on the invoice to enable Finance Office to contact the supplier to obtain a credit note or revised invoice as applicable.
Your supplier can provide a credit note for the 2. In some instances departments will have an arrangement with a supplier for a continuous supply of services such as leasing of photocopiers. In such cases the supplier provides services on a continuous basis and receives payments regularly or from time to time. The supplier should charge VAT at If you have any questions regarding this, please email eprocurement strath.
The Budget announced changes to the Cross-border VAT rules which represent a significant reform of the VAT regime applying to services and introduce important changes to the intra-EU reporting regime for goods. These changes will,. To comply with the new rules, the University will need to make fundamental changes to its current VAT accounting and reporting processes. From 1 January most services provided to business customers in other EC countries will be treated as supplied where the customer belongs and the customer will account for VAT under the reverse charge mechanism.
Services provided to non-business customers will generally be liable to VAT in the country of the supplier. In order for the University to comply with these new rules certain information will require to be obtained from your customer prior to an invoice being raised and you will need to pass these on to Finance Office when requesting a sales invoice to be raised.
In addition to the above and to ensure that we do not exceed the allowed HMRC threshold for EU goods supplied we require to monitor the level of such sales invoices issued. The above information will also be required when the University supplies goods e. Further information will be provided on how these changes effect the preparation and processing of a sales invoice. These changes to the place of supply rules may also affect purchases of consultancy services from within the EC countries.
For example in the past a German supplier would invoice the University for these services and no VAT would be charged. The VAT rate in France is now a head-scratching Anti-tax lobbyists accuse VAT of being a double tax because consumers pay for goods and services from already taxed income. VAT proponents claim it is a progressive tax: individuals who pay the most VAT spend the most on purchases. This line of reasoning is truer of a tax system such as the UK's, where a relatively broad set of exemptions means that poorer people pay a lower proportion of their income in VAT.
Zero-rated VAT applies in the UK on most food with the paradoxical exception of snacks , medicines, books and some forms of transport. Because providers can claim back VAT on what it costs to produce such items, the government effectively offers subsidies to these industries. Former UK exemptions that have been sacrificed on the altar of government need for revenue include takeaway food and home improvements. Since then, the reduced rate has been extended to non-discretionary or government-favoured purchases such as women's sanitary items, children's car seats, energy-saving materials, contraceptives, and quit-smoking products.
Some types of home improvement are also lower VAT rated. VAT has proved to be one of the EU's most enduring exports. However, the guaranteed fall in the popularity of any government that brings in new taxes has resulted in VAT rates round the globe generally undercutting the EU's. VAT: a brief history of tax. VAT rises from
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