Although the law around the VAT rate change is yet to be published, the initial set of guidelines should be positively received by taxpayers as they allow what appears to be a reasoned approach to dealing with the VAT accounting issues associated with such changes. In particular, those businesses engaged with the Public Sector will be pleased to note that VAT at 5% will still apply for contracts that were entered into prior to May 11 2020 (when the VAT rate change was announced) up until the end of June 2021, and businesses, such as insurers will also note that for invoices issued prior to May 11 but where services are provided post-1 July 2020, the 5% rate will still apply.
Source: Deloitte on LinkedIn
Source Orbitax
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