When there is a change in VAT rates in the UK, special rules apply to determine what rate to charge based on tax points. The tax point determines when a supply takes place for VAT purposes. If a supply takes place before the date of change in tax rate, VAT must be charged at the old rate, even if the invoice is issued later. For example, if a good was delivered on 30th March when VAT rate was 17.5%, invoice can be issued on 5th April but VAT should still be charged at 17.5% rather than new rate. However, businesses also have the option to charge VAT at the new rate, based on the basic tax point of removal or delivery of goods, rather than invoice date. This helps if the new rate is lower. Similarly, if a supply takes place after the rate change, VAT should be charged at new rate. But business can opt to still charge old rate if a payment was received or invoice issued earlier. When changing VAT rates, businesses may need to issue credit notes to revise VAT charged if goods were removed before but invoiced after the change. The VAT payable adjustments will reflect in future returns. For continuous supplies like subscriptions or rentals that span the date of change, VAT can be allocated based on old or new rate, depending on whether consideration was received before or after.