In his pre budget statement report on 24 November 2008, the Chancellor announced a reduction in the standard rate of VAT from 17.5% to 15%. The change is effective from 1 December 2008 and the rate will remain at 15% until 1 January 2010 when it will revert to 17.5%. The short time period between the announcement and the implementation date means businesses will have to make immediate changes to their accounting systems to account for the new rate, which will impact the accounting for both sales and purchases. Businesses should also be aware that there are special rules for accounting for supplies of goods and services that span the date of the change. It was also announced that measures will be introduced in the main 2009 budget to prevent the use of pre-payment schemes when the rate increases in 2010.