Change in VAT Rate

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					                                         Change in VAT Rate

From Monday 1st December 2008 the standard VAT rate is to be lowered to 15% from 17.5%, this
is a temporary measure to be in place for 13 months only.

For schools without their own bank accounts this will mean that you will continue to code up your
invoices and send in to the Payment Services for processing, but, we will be creating new VAT codes for
the new rate. We will inform you of these new indicators when they have been created.

For schools with their own bank accounts the change will mean that new VAT indicators need to be
created in your systems - one for input tax and one for output tax.
New indicators are required as for a time you will receiving a mix of invoices/income to be paid or
receipted with either the old and new rates on them.
The new VAT rates will not effect the VAT return to be sent to County Hall for the 10th December (as this
will deal with the transactions recorded for November), it will effect your return to be sent to County Hall
for the 10th of January, we will make the necessary changes to your VAT return pads in time for this
date and distribute to you.

For both types of school the VAT rules are as follows:

1. For invoices to be paid by the school after 1st December follow the VAT rate that appears on the
invoice received.

2. For invoices being raised by the school on or after 1st December use the new VAT rate 15%, even if
the services you are billing for are dated before the 1st December. This is due to the fact that the date of
the invoice becomes the tax point overriding the date of the services. The only exception will be if you
are billing for services that happened earlier than two months prior to 1st December, where this is the
case you will have to use the old rate of 17.5%.

3. You do not need to worry about any services you have billed for in advance of December 1st at the
old rate of 17.5%, as once again the date of the invoice overrides the date of supply.

If you have any questions on this matter please don't hesitate to contact either myself or Connie Bentley
01234 228524

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