John has much more experience in this area than I do, but reading the 'Anti-Forestalling Legislation' notes on the website http://www.hmrc.gov.uk/vat/forms-rates/rates/anti-forestall-guidance.pdf, it seems to me that 15% VAT can be charged on invoices dated before 1 January 2010, even where part of the service is to be provided after that date.
 
The notes appear to say that the anti-forestalling notes will only 'affect very few businesses', and that at least one of the following conditions has to be met: supply of services has to be to a 'connected person'; the supplier funds part/all of the customer's payment; the invoice doesn't have to be paid until after six months; the invoice is for more than £100K. None of these is relevant for our database payments.
 
There is also the question of 'continuous services' or 'single services'. 'Continuous services' do appear to require the apportioning of VAT, but seem to mainly include water/gas/electricity supplies and e.g. leasing of equipment billed quarterly. The fact that Steve has been told to treat his database service as a 'single supply' seems to imply to me that it is possible to charge the whole year at 15%: 'where you receive a payment or raise a VAT invoice before 1 January 2010 for goods or services you will be providing on or after that date, under the normal rules you should account for VAT at 15%' (Section 3.3 of 'VAT: reversion of the standard rate to 17.5%: a detailed guide...' http://www.hmrc.gov.uk/vat/forms-rates/rates/rate-rise-guidance.pdf) - you do have the option of apportioning the VAT, but this is not mandatory.
 
I've probably got this wrong, and I'm sure others will also comment....
 
Tony
 

Tony Kidd
Assistant Director, Financial & Corporate Services
Direct line: +44 (0)141 330 6778
Fax: +44 (0)141 330 4952
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Library
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The University of Glasgow, charity number SC004401 

________________________________

From: An informal open list set up by UKSG - Connecting the Information Community on behalf of John Cox
Sent: Tue 18/08/2009 17:19
To: [log in to unmask]
Subject: Re: [LIS-E-RESOURCES] rate change in VAT - question.



The advice Steven Tweedie has received from HMRC is consistent with the
approach he adopted last year in issuing credit notes, and is consistent
with the guidance I have received from HMRC, both directly and on the HMRC
web site.  Beware of the anti-forestalling provisions, that are designed to
prevent invoicing at 15% VAT for supplies that span the period before and
after the rate change.

John Cox
Managing Director
John Cox Associates Ltd
Rookwood
Bradden
TOWCESTER
Northants
NN12 8ED
United Kingdom
Tel: +44 (0) 1327 861184
Fax: +44 (0) 20 8043 1053
E-mail: [log in to unmask] 
Web: www.johncoxassociates.co.uk 


-----Original Message-----
From: An informal open list set up by UKSG - Connecting the Information
Community [mailto:[log in to unmask]] On Behalf Of Steven
Tweedie
Sent: 18 August 2009 16:47
To: [log in to unmask]
Subject: [LIS-E-RESOURCES] rate change in VAT - question.

Dear List Members,

I suspect this may open a whole can of worms! But here we go 
anyway......

As you may be aware many suppliers, including ourselves, issued VAT 
refunds last year to compensate for the change in rate from 17.5% to 
15%.

In our case we charged 11 months at 15% and 1 month at 17.5%

As you may be aware the VAT rate is going back up to 17.5% on the 1st 
January 2009. Our academic subs to the IEEE / IET online library start 
30th November. HMRC have advised us that we should charge VAT in 
accordance with the guidance on the following site. After several 
conversation with HMRC they assure us that we must treat our customer 
as "a single supply" this is due t the fact that we do not have 
evergreen contracts, i.e. subscriptions are ordered on an annual 
basis, and of course people have the option not to renew. In essence 
this means we must charge 15% VAT on the portion between 30th November 
2009 and 1st January 2010 and 17.5% on the rest.

http://www.hmrc.gov.uk/vat/forms-rates/rates/rate-changes.htm

I wondered if you have had any notification to the contrary from any 
other suppliers or indeed from your own VAT office.

Obviously for our commercial customers the rate is of no significance 
since they will claim back the full VAT amount.

Any feedback is welcome.

Steve


Steven Tweedie | www.contentonline.co.uk
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Skype steven_tweedie

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lis-e-resources is a UKSG list - http://www.uksg.org/serials
UKSG groups also available on Facebook and LinkedIn



lis-e-resources is a UKSG list - http://www.uksg.org/serials
UKSG groups also available on Facebook and LinkedIn