Budget 2020 – VAT

There were no changes announced to the rate of VAT.

The VAT registration and de-registration limits will remain frozen at £85,000 and £83,000 respectively until 31 March 2022.

VAT on e-publications

From 1 December 2020, e-publications (e-books, newspapers, magazines etc) will be entitled to the same, zero rated, VAT treatment as their physical counterparts.

VAT on women’s sanitary products

The rate of VAT on women’s sanitary products will be reduced to zero with effect from 1 January 2021. (Am I the only one asking here why they can reduce e-publications from 1 December, but women have to wait until 1 January?)

Postponed VAT accounting

From 1 January 2021 registered businesses will be able to account for VAT on goods they import from all countries, including the EU, on their periodic VAT return.

VAT fraud in labour provision in the construction sector

As announced in September 2019, the government has delayed the introduction of the VAT domestic reverse charge for building and construction services. The measure will now come into force on 1 October 2020.

The measure will, for certain supplies of construction services and related goods, mean that the customer will be liable to account to HMRC for the VAT in respect of those purchases rather than the supplier.


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