Feb 2020 new vat

You're referring to the changes to Value-Added Tax (VAT) in the UK that came into effect on February 1, 2020.

Here are the key changes:

  1. VAT rates: The standard VAT rate remained at 20%, but the reduced rate for certain goods and services was increased from 5% to 12.5%. The zero rate remained at 0%.
  2. VAT registration threshold: The VAT registration threshold was increased from £85,000 to £85,000 (no change).
  3. VAT return periods: The VAT return period remained at 3 months, but businesses with a taxable turnover below £1.35 million can now submit their VAT returns online quarterly, rather than monthly.
  4. VAT payment dates: The VAT payment dates remained the same, but businesses with a taxable turnover below £1.35 million can now pay their VAT in 2 installments, rather than 1.
  5. VAT digital services: The VAT digital services rules were updated to include more online services, such as online gaming and e-books. These services are now subject to VAT at the standard rate.
  6. VAT reverse charge: The VAT reverse charge was introduced for certain construction services, which means that businesses providing these services will no longer need to charge VAT to their customers, but will still need to account for the VAT on their VAT return.

These changes aimed to simplify the VAT system, reduce the administrative burden on businesses, and improve the accuracy of VAT returns.