VAT changes for limited company contractors in 2010

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VAT changes for limited company contractors in 2010

Posted Jan 4, 2010

Alongside the return to the old rates of VAT from 1st January 2010, many current contractors will also have to get used to filing their returns online from 1st April 2010.

From 1st January 2010, limited company contractors on the standard VAT scheme will need to charge 17.5% VAT once again as the 15% temporary rate comes to an end. The flat rate VAT scheme percentages have also been revised in line with the standard rate, with IT contractors using the 13% rate (up from 11.5%).

Additionally, from 1 April 2010, if you have an annual VAT exclusive turnover of £100,000 or more you will have to submit your VAT returns online and also pay your VAT liabilities electronically.

Any new contractors who register for VAT from 1st April 2010 onwards will have to file online from the start, whatever their turnover.

Going online will obviously suit most IT contractors - the number of errors are reduced, calculations are made automatically, and you will also be greeted with an on-screen acknowledgement that the return or payment have been received.

If you're using HMRC Online Services for the first time, you will have to register for an online account. You can find out more on HMRC's VAT pages.

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