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Budget comment: on VAT

In the countdown to the General Election the Chancellor's room for manoeuvre is inevitably limited. The VAT changes contain no vote-catchers only routine provisions and one anti-fraud measure.

From 1 April 2010 thresholds are raised to £70 000 (registration) and to £68 000 (deregistration). From 1 May 2010 fuel scale charges are increased in line with inflation and aligned with direct tax bands.

From 1 November 2010 to combat carbon trading frauds intra-Community the reverse charge will be extended to services (to be prescribed by statutory instrument) and will apply in the same way as it does for goods such as mobile phones and CPUs. Additional reporting requirements will also be imposed. All these proposals are to be welcomed.

A further four measures are proposed for a second Finance Bill in the new Parliament. The first extends the reverse charge to cover all supplies...

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