On the 4th January 2011 the headline VAT rate in the UK will be increasing from 17.5% to 20%. As a Clear Books user you don’t need to worry about this change as the switch over will be automated.
You can already create invoices using the new 20% VAT rate if necessary. Currently the 20% option is the last option in the VAT Rate drop down. We will make this rate more prominent in the New Year.
Based on the invoice date the system will determine if it thinks the VAT rate on a transaction should be 17.5% (pre 4th Jan) or 20% (post 4th Jan) and warn you accordingly. This warning can be ignored.
Flat Rate Scheme
The system will lock off your current flat rate VAT period to the 3rd January 2011. When you log in from the 4th January onwards you will be required to enter your new flat rate percentage. The system will then handle the switch over of vat rates on your VAT return.
All recurring invoices set up to use 17.5% will be updated to use the 20% VAT rate where appropriate.
All product items used to populate invoices quickly will be updated from 17.5% to 20% where appropriate.