Festive Update for Christmas 2010

Nasa Consulting - Festive Updates

As another year passes and we wish our clients an enjoyable festive season, we are aware that recently our 'monthly' newsletters have slowed.  Our guilt for this is set off by us having covered any major industry/tax changes over the year and that we are always at hand if advice is needed.  Importantly there are VAT changes from 04 January 2011 and so this newsletter covers:

• VAT increase to 20%
• £150 HMRC Christmas party allowance

1. VAT rises to 20%
   
   Any invoice you send to a client dated from 04/01/2011 must have VAT at this higher rate.  Those clients using an invoice template will need to make the formula alteration.
   
   Accordingly anyone operating their own accounting software needs to ensure the VAT rates are lifted to 20% on costs as well as sales.  For clients operating the Flat Rate VAT system, there is a change in the percentage flat rate payable to HMRC which ensures they are no worse (or better!) off.
   
   
2. £150 HMRC Christmas party spend
   
   The tax man allows all companies to spend up to £150 on their employees for Christmas. As long as this is open to all employees at Christmas time and does not exceed this amount there should be little concern. However there are some strings attached if it is outside of these criteria, and anyone with further considerations should follow HMRC guidance on:

http://www.hmrc.gov.uk/paye/exb/a-z/s/social-functions.htm