Commercial and Systems Implications of the 20% VAT Rate - Making the Most of the Change

As George Osborne and the UK coalition has decided to raise standard VAT to 20% from next January, "usefully" on 4th January rather than on 1st , at least we have the chance to prepare properly for the rate change.

With only a few days' notice of the reduction to 15% in 2008, and the subsequent reinstatement of the 17.5% rate, I produced a series of articles on the key system issues.

Although the increase to 20% is similar, it will be different in both the principles and practical application. I have written an article in that VAT blog that sets out some pointers in these key aspects:

1. Commercial impact
2. Sales pricing
3. Issues for software and SaaS services
4. Additional issues for users

As mistakes can be expensive, in terms of VAT penalties and unnecessary administration during the transition, it's worth planning and implementing carefully.

I'm encouraging both vendors and users to comment on how their specific software is going to cope with the rate change, which I trust will add to the value.

Click here for the full article "Commercial and Systems Implications of the 20% VAT rate".

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