The Budget 2011 VAT

There were no changes announced to the rate of VAT.

The VAT registration and de-registration limits have been increased in line with inflation, with effect from 1 April 2011, to £73,000 and £71,000 respectively.

The Chancellor also announced a change in the low level consignment relief level for VAT, from £18 to £15 from 1 November 2011.  This is the threshold below which goods imported from outside the EU are VAT free.

Comment: This measure is mainly to target operators setting up in the Channel Islands to ship relatively low value items (such as DVDs) to the UK VAT free.  If you ever wondered why companies such as play.com send everything you order in separate packges – here is your answer – if the value of each package is less than £18 (soon to be £15), they can ship it VAT free, giving them a price advantage over UK based suppliers.

 

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