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Under what circumstances might you issue this letter?
“Dear Client – I have some good news. From 1 January 2021, I will no longer need to charge you 20% VAT on my services. I suggest that we share the VAT saving – I will increase my fees by 10% from this date.”
It could be that you have deregistered from VAT on 31 December 2020, on the basis that UK taxable supplies are expected to be less than £83,000 in 2021, the deregistration threshold. This would be correct, and relevant in many situations in the post Covid-19 world. But there is another situation that will be relevant for many UK businesses, linked to the end of the transition period on 31 December 2020 following the UK’s departure from the EU.
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