Menu Introduction HMRC get tough on overdue taxes Allowances Alert! All aboard for VAT online A simple solution? Business angels Penalty delay criticised The importance of occupation Internet Trading - do you have anything to declare?
Newsletter - Winter 2011

All aboard for VAT online

HMRC has now decided that all remaining VAT registered businesses will be required to file VAT returns online and pay any VAT due electronically from 1 April 2012.

Existing VAT businesses with a turnover of £100,000 or more and all new customers that have registered for VAT since 1 April 2010 are already required to file and pay online.

The new measures will have effect from 1 April 2012 in relation to accounting periods starting on or after that date, for those businesses with a VAT exclusive turnover below £100,000. Only two exemptions are proposed:

where the business is insolvent or
where run by people who are practising members of a religious group whose beliefs are incompatible with the use of computers.

All businesses affected should be advised by letter, in February 2012, of their new responsibilities and how to meet them. Businesses which believe they fall into either of the two exempt categories above should notify HMRC of the position, once they have received that letter (which will explain the process to follow).

Electronic payments

The new measures also mean that any VAT due must also be paid electronically from the same date. There are various ways of paying electronically and not all of them involve the use of a computer, for example, phone banking, BACs, CHAPs and payment by Bank Giro Credit (at a participating bank or building society) for cash or cheque payments.

Will penalties apply?

HMRC has stated that they recognise this will not be straightforward for all businesses and so will not initially penalise businesses which continue to file paper returns instead of online returns in the first year until 31 March 2013.

However, the sooner you get the online habit, the lower the risk of potential penalties. In any case the penalty for failure to file online is distinct from the late payment penalties (default surcharges) which continue to apply when a VAT registered business pays late, or not at all.

Please contact us about how we can assist you in this process including our range of online services available for your business.

Introduction »