The UK Government has just announced that the standard rate of VAT will be reduced to 15% as of 1 December 2008. Only standard-rated sales are affected. There are no changes to sales that are zero-rated or reduced-rated for VAT. Similarly, there are no changes to the VAT exemptions.

The NetSuite Tax Engine allows this change to be made without any software updates, but you will need to make a few simple configuration changes in your NetSuite account. In order to guide you through this process, we have provided step-by-step instructions below, and we will also be hosting a free training session on Friday, 28 November.

What does this mean to you and your business?
For any sales of standard-rated goods or services that take place on or after 1 December 2008, you should charge VAT at the new rate of 15%. You should use the new rate for all VAT invoices that you issue on or after 1 December 2008 except where:

• You provided goods or services more than 14 days before you issued the VAT invoice
• You were paid before 1 December.

In these cases, your sale took place before 1 December and you must use the old rate of 17.5%.

Action required
You will need to create a new tax code in NetSuite with the 15% rate with an effective date of 1 December 2008 and ensure that the tax code on all your Items is amended to reflect this.

Here are step-by-step guides on how to make this change:

	Click here for instructions for making this change in NetSuite.
	Click here to download the HMRC guidance document.

Free Web training session
In order to provide extra support to you when making these changes to your account, NetSuite will be hosting a FREE customer training session:

If you have any questions, please contact NetSuite Support or your NetSuite account manager.