Budget 2003

 
Introduction
Personal Income Tax
National Insurance 2003/04
Pensioners
Employees
Savings
Capitals Gains Tax
Stamp Duty
Inheritance Tax
Corporation Tax
Business Tax
Value Added Tax
Other Measures
Tax Tables
National Insurance
 
   




Value Added Tax


Registration threshold

From 10 April 2003, the level of taxable turnover at which a business is required to register for VAT increases by £1,000 to £56,000. The level of predicted future turnover
at which a business can deregister also rises by £1,000 to £54,000.

Schemes for small businesses

The flat-rate scheme, which allows small businesses to account for less output tax and not claim input tax, was introduced last year for traders with turnover of up to £100,000pa. This is increased to £150,000 with effect from 10 April 2003.

The level at which a business can join the annual accounting scheme without already being registered for a year is also increased from £100,000 to £150,000.

Tax Tip

At high turnover levels, these schemes can - in some cases - produce good savings.


Vouchers

The purchase and sale of "face-value vouchers" leads to a number of VAT anomalies. Up to now a person buying and selling vouchers (which include some mobile phone top-up cards) has not had to account for VAT on sales, because the vouchers are treated as cash rather than services.

From 9 April 2003, the issue of vouchers by a trader who will honour them on redemption remains non-VATable; but the sale of vouchers by anyone else becomes chargeable to VAT.

E-commerce

The Budget includes provisions which derive from European law changes to services sold over the internet. The measures are complicated, but in summary, from 1 July 2003:

* if you are a UK-based business buying services which are downloaded from the internet, you will have to account for the "reverse VAT charge" if the seller is outside the UK.
* if you are a UK-based business selling such services to anyone belonging outside the EU, you will no longer have to account for output tax on the sale.



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