VAT increase

The VAT is scheduled to increase from 15% to 17.5% on Jan 1st 2010

HM Revenues and Customs have been extremely helpful in their advice ( I now know more than I thought there was to know about the definition of Tax Points...)and have some very comprehensive hand outs they can email you or you can email gaynor@bestyears.co.uk and she will forward them to you

Basically its quite straight forward but as with any officaldom there is lots of details and provisos. A couple of things we have noted

• If a product is not standard VAT rate (ie 0% or reduced as in child car seats) there is no change
• Refunds on products bought at the 15% rate and returned after the VAT has increased should be refunded at the 15% rate
• The VAT man is going to be particularly hot on people trying to avoid paying the increased rate of VAT which they are terming anti-forestalling and have introduced very strict rules on this. They become sensitive when purchases are in the £1000s rather than £100s so if we receive an order over £10,000 in Dec 2009 we will need proof that the VAT is fully recoverable. We have a policy not to fall out with the VAT man. He scares us!

As a soft toy and teddy wholesaler we do not sell directly to the public so the VAT increase is reasonably straight forward. The only grey area we have involves the fact that the warehouse is closed from 21st Dec to 4th Jan 2010

Having discussed this with the VAT man we will be implementing the following

If you are an existing customer and want to place an order during this time please fax it or email it as per normal. We will raise the invoice based on the date of the order even tho the goods will not be delivered until 3rd Jan at the earliest. VAT on these orders will be charged at 15%. Alternatively please place the order via the website where you will automatically be charged 15% VAT

If you are a new customer and want to place an order between 21st Dec and 2nd Jan there are slightly different rules as you will not have existing credit facilities with us. If you wish to pay at the 15% VAT rate please place the order on the website. As payment then takes place before the VAT increases you will be charged 15%. If you email or fax an order through we will charge you 17.5% as payment will not take place until after the VAT has increased

Hopefully this is reasonably clear but if you need any more info please do email gaynor@bestyears.co.uk