Archive - 2002 Budget:

Budget Highlights Business Tax & Investment Incentives
Capital Taxes & Duties Income Tax & Personal Savings
Value Added Tax Company Cars
National Insurance Other Measures Announced
2003/04 Tax Calendar Top ten 2003 Budget Predictions
Budget Report Logo


Value Added Tax

From 25 April 2002 1 April 2001
Standard rate 17.5% 17.5%
VAT fraction 7/47 7/47
Registration - last 12 months or coming 30 days over £55,000 £54,000
Deregistration - coming year under £53,000 £52,000
Cash accounting scheme - up to £600,000 £600,000

Optional Flat Rate Scheme

As from 25 April 2002 a new scheme will be introduced for businesses with a tax exclusive annual turnover of up to £100,000 pa, or for businesses with exempt income included, up to £125,000 pa. This will allow such businesses to avoid having to keep detailed records of all purchases and sales invoices in return for paying a flat rate of VAT on their tax inclusive turnover. Measures will be introduced to increase the threshold to £150,000 pa from April 2003. The flat rate percentage will depend upon the type of business.

Annual Accounting Scheme

As from 25 April 2002 the 12 month qualifying period for businesses with a turnover up to £100,000 will be abolished and revised measures in respect of interim payments will be introduced.

Bad debt relief

The current requirement that a business seeking bad debt relief has to write to their debtor advising that a claim has been made will be removed from a date to be announced. Administrative concessions introduced in December 2001 relating to bad debts and the allocation of payments between credit and the supply of goods will be confirmed where goods are sold on HP or similar conditional sale.

Reduced rate for residential conversions and renovations

The reduced rate of 5% VAT will be extended further from 1 June 2002 to cover a range of properties.

Removal of automatic penalties

For small businesses with a turnover up to £150,000 the automatic imposition of penalties when VAT returns or payments are late will be abolished and replaced by help and advice.

Assistance for importers on VAT paid at importation

The current requirement to pay VAT up front on imported goods will be abolished in 2003 for certain compliant importers who will be allowed to defer payment until their VAT return is due.

Anti avoidance measures

Measures will be introduced to block three schemes which involve second hand goods, face value vouchers, and certain partially exempt businesses.

Charities

Relaxed treatment of zero rating for new annexes used only partly for charitable purposes will be introduced from 1 June 2002 as will be further measures for calculating VAT due upon any change in the charitable use of buildings.

EC measures

As part of an EC reform of invoicing requirements, new measures will be introduced after March 2003 covering the details required on invoices, their retention and storage, the ability to send invoices electronically, and the opportunity to outsource invoicing operations and self billing without prior approval.



Business: 
Personal:  Introduction to the Tax System | Planning Aspects | Home Aspects
Pensions | Aspects of Investments and Investing | VCT & EIS
Tax:  Budget Report | Tax Guide | Financial Planning Guide
Tax Calendar | IR35 | PAYE & NI | VAT | Year End Tax Planning





http://www.icaew.co.uk/


Register | Login | Logout | My Profile | Terms and Conditions
Copyright © Payne Sherlock. All rights reserved.