VAT Archives - WRLO Accountants

HMRC updates guidance on reduced VAT rate for summer holidays

WRLO Accountants — Mon, 17 Aug 2026 16:50:29 +0000

HMRC has updated its guidance on the temporary reduced rate of VAT applicable to children’s meals, family attractions and tickets. Between 25 June and 1 September 2026, the rate of VAT on children’s meals and specific attractions is reduced from 20% to 5%. The new guidance, issued on 27 July, includes additional details on party packages, prepayments and mixed supplies. The latest guidance also confirms that users of the flat rate scheme should continue to apply their current percentage to calculate their VAT liability, and that the temporary reduced rate doesn’t apply to margin scheme supplies under the tour operator’s margin scheme. Ed Saltmarsh, Tax Technical Manager at the Institute of Chartered Accountants in England and Wales (ICAEW), said: ‘We highlighted the challenges facing businesses in dealing with the temporary VAT cut, from having to update materials, processes and systems at short notice to dealing with boundary issues, when it was first announced. ‘The fact that HMRC has had to update its guidance one month after the policy took effect highlights the complexity of this measure.’ Press release: ICAEW HMRC guidance: Revenue and Customs Brief 5

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Financial benefit of MTD could be as high as £915 million

WRLO Accountants — Sat, 08 Mar 2025 16:44:52 +0000

The financial benefits of MTD for VAT could be as high as £915 million, according to analysis carried out by HMRC. Since April 2022 all VAT-registered businesses should be using MTD compatible software to keep digital records and submit returns. HMRC used responses from a survey with businesses in MTD for VAT using fully functional software to estimate the average time savings businesses have made. The results showed that, on average, businesses have saved time on their ‘business’ finances and record keeping’ compared to time spent before MTD. Across all VAT businesses using fully compatible software, the time saved is estimated to be between 26 hours and 40 hours per business per year. HMRC said that if this was extrapolated to the population, it estimated a time saving of between 32 million hours and 49 million hours in the 2022/23 tax year across all businesses in MTD for VAT. The financial value of this time is estimated to be between £603 million and £915 million. HMRC said: ‘The results of our analysis provide strong evidence that Making Tax Digital is having a positive impact for businesses. The findings complement other published estimates of the administrative burden of Making Tax Digital […]

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Chancellor promises to drive growth and raises £40 billion in taxes

WRLO Accountants — Sat, 02 Nov 2024 16:07:31 +0000

Chancellor Rachel Reeves pledged to ‘invest, invest, invest’ to drive growth and ‘restore economic stability’ in the Autumn Budget. The Budget, which was Labour’s first in over 14 years and the first ever delivered by a female Chancellor, saw £40 billion in tax announcements. Ms Reeves repeated her claims that the government had inherited a £22 billion ‘black hole’ in the public finances from the Conservatives. Pre-Budget speculation had centred on the likelihood of increases to employers’ National Insurance contributions (NICs), Capital Gains Tax (CGT) and Inheritance Tax (IHT). The Chancellor announced an increase to the rate of employer NICs by 1.2 percentage points to 15% from 6 April 2025. However, the Secondary Threshold – the level at which employers become liable to pay NICs on each employee’s salary – will reduce from £9,100 per year to £5,000 per year. CGT on non-residential assets will increase from 10% to 18% for those paying the lower rate, and 20% to 24% for those paying the higher rate for disposals from 30 October 2024. These new rates will match the residential property rates. The CGT rates applicable to assets qualifying for Business Asset Disposal Relief (BADR) and Investors’ Relief will remain at […]

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