Standard rate of VAT increase

4 January 2011

The standard rate of VAT increased from 17.5% to 20% on 4 January 2011. For any sales of standard-rated goods or services that you make on or after 4 January 2011 you will be charged VAT at the 20% rate.

Useful information for businesses when calculating VAT

If you have a cash business and calculate your VAT using the VAT fraction you must use the VAT fraction of 1/6 on your standard-rated VAT inclusive sales from 4 January 2011.

The change only applies to the standard VAT rate. There are no changes to sales that are zero-rated or reduced-rated for VAT. Similarly, there are no changes to the VAT exemptions. Any sales you make at these rates are unaffected by this change.