Leader of the Council – Minutes – 1 December 2008

62 (27) THE IMPACT ON FEES AND CHARGES OF THE CHANGE TO VAT RATE – The Service Director Finance submitted an urgent report seeking a decision on the principles to be followed in implementing the administrative change to the standard VAT rate.

As part of the Pre Budget Report on Monday 24 November, the Chancellor announced a cut in VAT from 17.5% to 15%. The decrease was to be effective from 1 December 2008, hence the reason for urgency, and would last for 13 months.

Not all services the council charge for attract VAT, however, those where VAT was to be added to the price quoted then from Monday 1 December 2008, any charges would reflect the reduced VAT rate.

For goods and services where the price included VAT the council could either reduce the charge, which would result in additional income to the council, or pass on part or all of the VAT reduction.

For goods and services to be delivered wholly or partially after 30 November, where an invoice had already been issued or payment made, the council had the option to issue a credit note or refund for the reduction in VAT chargeable.

Resolved – (a) That the proposal that charges be decreased where the reduced VAT be a minimum of 10 pence and in multiples of 10 pence, as outlined in paragraph 3.1 of the report, be approved and adopted, and (b) that the proposal that no credit notes or refunds be issued in the case of goods and services wholly or partially delivered after 30 November but invoiced or paid for on or before that date, be approved and adopted.