I have just been asked about the VAT increase that is due to happen at 00:01 a.m. on the 1st January 2010 back to 17.5% and how it affect Pubs/Restaurants that are hosting a New Year’s Eve party. I thought it a good idea to clarify this point for everybody who may be wondering.
The rate is due to change at that moment, but for publicans/restaurants lucky enough (these days) to enjoy a busy New Year’s Eve party at their Premises, [private_basic]exactly when are they supposed to make the VAT rate change? The answer is simple. Not until later in the morning of the 1st January 2010. You will not need to adjust all the prices upward as the clock chimes midnight. HMRC are allowing existing party’s to continue at the old VAT rate of 15% until they finish in the early hours of the 1st.
Don’t forget to change the prices before you open next though!
I hope this clears the question up.
Please do not hesitate to contact me on 0800 047 0731 if you have any questions about the change in VAT rates. There was enough confusion when the rate dropped last December but the price of getting it wrong then wasn’t as bad as now… so please ask – even if you are not a client of mine. I will be happy to explain the rules to you.