Are you ready for Important VAT Changes in 2010?
30/09/2009
As we are all aware the majority of the changes to the European Union VAT Directive, "VAT package", which was adopted by the European Council more than a year ago, will come into force from 1 January 2010. The law will substantially change the principles of defining the place for supply of services and will ultimately lead to a different VAT treatment of services supplied to, or purchased from, a company established in a registered country.
In addition to these changes, the rate of VAT in the UK is due to revert back to 17.5% in the pound, which will require Hotels, Venues and Restaurants to reprint Tariffs and Menus again, as well as adjusting of their pricing on external and internal technology platforms.
These changes will be significant in their own right, however, you may not be aware of some changes that have come to light through Corporate Travel & Hotel Agents who have had recent VAT inspections. They have been informed that there is an instruction to charge VAT on invoices processed via Bill Back (Invoice Consolidation Services) on behalf of their client, as they (the agency) are providing a service to the client. This would mean that the client would be paying VAT (15/17.5%) on top of their original bill.
As of today, clarification is still being sort in relation to this ruling; however it is clear that all Travel and Hotel Booking Agencies should be discussing the potential impact with their accountants.