Registration threshold

From 1 April 2010, the level of taxable turnover at which a business is required to register for VAT increases by £2,000 to £70,000. The level of predicted future turnover at which a business can deregister also rises by £2,000 to £68,000.

Fuel scale rates

Since 1 May 2007, the scale rate which must be applied by a business which provides fuel for its employees to use for their private motoring has depended on the CO2 emissions rating of the car. The charge is not the result of a simple formula as for the income tax charge, and individual figures have to be looked up in a table published on the HMRC website (www.hmrc.gov.uk) or elsewhere. A new table of rates applies for VAT return periods commencing from 1 May 2010 onwards, representing a 12% increase in the amounts which have applied since 1 January 2010.

Tax Trap

Visiting officers always look at fuel scale rates – check them!

Postal VAT

Up to now, all postal services provided by The Post Office (Royal Mail Holdings plc) have been exempt from VAT. Following a legal challenge by private delivery companies, the rules will be changed to require VAT to be charged where Royal Mail is in direct competition with such companies. The exemption will still apply to the Royal Mail's "universal service obligation", which covers most delivery services to private customers (including postage stamps). Commercial customers who negotiate price terms may have to pay VAT from 31 January 2011.