Wednesday, October 07, 2009

Longer new year's eve parties thanks to VAT rate change

Spare a thought for the pubs and clubs that will remain open beyond midnight on 31 December when the VAT rate reverts to 17.5%.

Will it be necessary to issue two VAT invoices? One charging VAT at 15% for goods and services provided before midnight and another at 17.5% for those provided later into the night after the rate changes? Can you imagine the mayhem - and the unwelcome sight of barmen running around trying to issue valid VAT invoices mid-party?

It seems that the Government wants to avoid spoiling parties in this way as the Financial Secretary to the Treasury announced in May that:

"HMRC will allow a few hours’ trading grace in which [pubs and clubs] may continue charging the 15 per cent. rate for a session that goes into the early hours of 1 January."

So expect some parties to continue well into the morning of New Year's day. If you attend one, do sing a vote of thanks to the Government for giving you an excuse to party longer.

And what chance the necessary VAT rate changes will be made correctly later when everyone's suffering from their hangovers? Ok, maybe it won't be so much fun after all.

My thanks to Mike Thexton for drawing this to my attention.

I wrote a more serious piece about the VAT nightmare before Xmas, that is now looming, shortly after the VAT rate changes were announced.
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