An IT contractor's tax question over whether they can invoice their 2011 fees prior to the forthcoming VAT rise has been answered, which may help other freelancers facing similar confusion.

A Freelanceuk.com reader asked whether HM Revenue & Customs (HMRC) would consider this practice as tax evasion, because the invoice would be dated December 31st 2010, before VAT rises from 17.5 per cent to 20 per cent on January 4th 2011.

Responding, VAT partner at Kingston Smith Adrian Houstoun said HMRC has implemented some "anti-forestalling provisions" to combat this.

In order to charge VAT at 17.5 per cent, the supply should not be to a connected person or organisation, the gross value of the supplies should be under £100,000 and full payment must be due within six months of the invoice.

Additionally, the customer should not receive any kind of funding to enable payment.

HMRC has issued a number of resources on its website to help freelancers and tax professionals to clarify the implications of next year's VAT rise.