Flat Rate VAT
The reduction of the standard rate of VAT from 17.5% to 15% from 1 December 2008 has generally been administered well. However, if you use the VAT flat rate scheme, your VAT flat rate percentage will have changed. You should check the HMRC flat rate table (www.hmrc.gov.uk/vat/account-flat.htm) for your new rate.
HMRC Interest Rates on Overdue and Overpaid Tax
HMRC have been changing their interest rates frequently over the past few months as a result of the Bank of England base rate changes. Legislation has been put in place allowing HMRC to change their interest rates more rapidly. Most interest rate changes should now apply within 13 days of the Bank of England base rate changes, where this could previously have taken a month.
Interest is calculated from the original due date at the various rates on a daily basis, but at present no interest at all will arise for the period after 27 January 2009 on repayment of overpaid tax. The table below shows interest rate changes over the last 12 months:
|From||% on Overdue Tax||% on Overpaid Tax|
|6 January 2008||7.50||3.00|
|6 November 2008||6.50||2.25|
|6 December 2008||5.50||1.50|
|6 January 2009||4.50||0.75|
|27 January 2009||3.50||0.00|