TaxCorporate TaxSage warns of VAT change complications

Sage warns of VAT change complications

Two thirds of businesses could be leaving preparations for VAT changes too late warns financial software giants

Sage has warned businesses to prepare for the VAT changes or face the
consequences.

The financial software provider has found that just a third of businesses
will be prepared for the VAT changes before they close their offices for the
Christmas period.

The VAT rate will return to 17.5% on 1 January 2010 causing disruption to
accountancy firms and businesses in the New Year.

“This is cause for serious concern – managing the change for something as
integral as VAT is not as easy as simply flicking a switch. In fact, it can be
hugely complex for businesses both small and large,” said Kevin Hart, head of
government relationships at Sage UK & Ireland.

“Those that fail to plan the changes now will pay the price later,” he added.

When the VAT rate was reduced this year, businesses were given just four days
to prepare for the amendments. Sage has said that its VAT development team and
support staff had to work around the clock to prevent widespread disruption.

There are special arrangements being drafted for certain businesses operating
beyond midnight on 31 December.

Sage is advising its clients to get in touch with their accountants as soon
as possible to discuss how the changes will impact them.

Further reading:

Tax increases loom as government debt grows

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