What can we learn from the UK?   Leave a comment

At one minute past midnight on 31 December 2009 VAT in the United Kingdom went up from a standard rate of 15% to 17.5%. 

The UK VAT legislation is more complicated than New Zealand’s. For a start, they have a lot of reduced rates (for example for some foods) and also exemptions from VAT altogether which New Zealand does not have.

The UK also have more detailed legislation dealing with rate changes than we have.

For one thing, they have “anti-forestalling” legislation which is intended to prevent the manufacture of VAT savings by pre-invoicing or pre-paying for supplies before the rate increase comes into effect. New Zealand has nothing like that.

However, the Inland Revenue Department has issued a warning that they will be on the look out for any excessive cases of advance invoicing or paying which is done to beat the GST rise. Excessive cases will be considered by the IRD to be “tax avoidance”.

Be warned!

Iain

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Posted June 14, 2010 by Iain Blakeley in Rate increase to 15%

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