Let’s be fair. Most of us have plans for New Year that are unlikely to involve changing our prices, but while traditional shops will have the benefit of closing time over the New Year to make their adjustments, most websites are open 24 hours a day, seven days a week and that means at midnight on January 1st 2010, your site need to be updated.
The rules on VAT charges are pretty clear. Any transaction where the exchange of goods or services has occurred after midnight will encounter the increased VAT charge. If you are running a pub or club over the New Year there is a slight relief, but for those of us who buy and sell online there is no such grace period.
While you might not expect many visitors to be logging on to your website as Big Ben strikes, how soon afterwards can you expect business? Busier retail sites might see traffic as soon as the next morning, perhaps.
If you trade online and charge VAT, you need to be confident that your website will accurately reflect the VAT change. Ask whoever manages your website whether they can set up a changeover automatically – this is ideal. If not, ask how soon afterwards they will change the site and be sure that you are happy with the timelines.
The official view from HMRC appears to be that if you issue invoices with the incorrect rate, you will then need to send a credit note and reissue a new, adjusted invoice. You will probably also need to collect the difference from the customer. Of course, HMRC might take a leniant stance on smaller traders but this is not a given.
Therefore, it is worth getting piece of mind as early as possible, so you can relax and be sure everything is covered as you count in the new year.
A Happy and Prosperous 2010 to all our readers!
All customers of Latham IT with a current maintenance and hosting contract will be updated at midnight. We are also sending advice to incidental support customers about the changeover and what they will need to do.