A Connect upgrade will be available for you from 28th December. This upgrade will automatically change the VAT rate for all items with 15% VAT to 17.5% VAT making the transition much easier for you. We also have a mass price updater to allow you to very quickly change pricing if you so wish.

The upgrade will be issued for 9am on the 28th December so please ensure you close down the Connect software on each machine to be upgraded after this time. We suggest doing this before the 31st December. If you do it afterwards the VAT change will not be backdated.  Once you have done this, the VAT rate will automatically change the next time you use your Connect software after midnight 31st December 2009.

 

To confirm the VAT change has been applied after the 31st December please run the Health Check from your Till or Back Office. 

Our office opening times:
23rd December 9:30 to 5:00am
24th December 9:30 to 5:00am
29th December 9:30 to 5:00am
30th December 9:30 to 5:00am
31st December 9:30 to 5:00am
4th January 9:30 to 5:00am
5th January 9:30 to 5:00am

Passing on the VAT Rate Increase
This is a commercial decision for you to make. You have the following options here:

1. Do nothing. Some retailers are proposing to hold their prices, particularly if prices are set at certain price points, or are small prices. As long as you charge the correct amount of VAT the price is your choice.
   
   
2. Changing the price in Connect.
• You can increase the total retail price by 2.2% (for products with Standard Rate VAT). To help you do this we have included our Mass Price Updater free with this update. You can use this as soon as you receive the update. This is usually sold for £190 but we felt it would be helpful to make it broadly available free of charge. A helpsheet is available on how to use this.
  

To pass on the VAT Rate increase within Connect, click here to follow our simple two step process.

When will I receive the update from Intelligent Retail?
The update is being sent from the 28th December. You will see a new sticker on the welcome screen; for an example see our webpage . Please ensure you close down your computers every night so that the update will be installed. The update will not change the VAT rate instantly, it includes a program that will change the Standard VAT rate at just after midnight on the 31st December. How does this affect some or all of my products which are at a non standard VAT rate, eg. 0% or 5%.
These will not be affected. The change will simply alter those products which have standard 15% VAT up to 17.5% VAT. For any customer operating a Margin Scheme VAT, it will only alter the 15% component up to 17.5%.

Does this affect any reports?
Some customers like to occasionally run a report on the value of their stock holding. This is called a Stock Holding Summary by Category report. When you run this after the VAT change, it will reflect the new standard VAT rate at 17.5% instead of 15%. This is because the report always looks at current stock value. If for any reason you want a report of your stock holding with 15% VAT then please print this off by Thursday 31st December

Does this affect my product pricing?
No. The change will only alter the VAT rate. If you have a product that has a sale price at £19.99 it will still be £19.99 after the change. However, we are providing all customers with a Free Upgrade to our Mass Price Changer. This usually sells at £190 but we feel that all customers would benefit from having it and we are keen to help.

HMRC ADVICE

The HMRC have now issued advice to businesses following the government announcement about the change to VAT on January 1st. You can read about how retailers are affected on the HRMC website.

If you have a software package that automatically calculates the VAT, you will need to ensure that the VAT rate is changed from 15% to 17.5% from 1 January 2010. This may be something that you can do yourself – otherwise you will need to contact your software provider or supplier for assistance. Most software packages should have the in-built capability to deal with changes in the rate. You may be able to adjust your electronic till yourself but if not you will need to contact your till supplier for assistance. If your till has not been amended to calculate 17.5% (rather than 15%) by 1 January you will need to calculate the VAT manually. You simply take the standard-rated gross takings calculated by your till and multiply that sum by the new VAT fraction of 7/47 this will give you the amount of 17.5% VAT.

What if I use a computer, VAT software or an electronic till?
If you have a software package that automatically calculates the VAT, you will need to ensure that the VAT rate is changed from 15% to 17.5% from 1 January 2010. This may be something that you can do yourself – otherwise you will need to contact your software provider or supplier for assistance. Most software packages should have the in-built capability to deal with changes in the rate. You may be able to adjust your electronic till yourself but if not you will need to contact your till supplier for assistance. If your till has not been amended to calculate 17.5% (rather than 15%) by 1 January you will need to calculate the VAT manually. You simply take the standard-rated gross takings calculated by your till and multiply that sum by the new VAT fraction of 7/47 this will give you the amount of 17.5% VAT.