COMPULSORY ONLINE VAT: Are you prepared?
SINCE April 2010, it has been compulsory for all newly VAT-registered businesses to fi le online and pay their VAT electronically. This has also applied to all those businesses that had annual sales in excess of £100,000 at that date.
April 2012 will see the end of the paper VAT return, with mandatory online fi ling and electronic payment of tax becoming compulsory for all businesses. The two exemptions will be businesses going through insolvency procedures and businesses where the owners have a religious objection to using computers.
During February 2012, HMRC sent out letters warning businesses of their obligation to fi le online from April 2012. To be absolutely clear, compulsory fi ling applies to VAT periods beginning on or after 1 April 2012. Therefore, the earliest compulsory electronic VAT return for some businesses will be for the quarter ending 30 June 2012, although for others it will be 31 July 2012 or 31 August 2012.
Registration Registration is dealt with
through the HMRC website: www.hmrc.gov.uk
and the following information will be required as part of the registration process:
The effective date of VAT registration which is found on the certifi cate of VAT registration. HMRC do have a helpline (0845 0109000) to help resolve problems with date of registration.
The amount of VAT paid on the last submitted return and the fi nal month of that return.
By Martin Humphreys, Partner at Cranbrook offi ce
The postcode and VAT registration number of the business.
What if you are not comfortable with making
an electronic payment?
HMRC will be introducing a Bank Giro credit option for those businesses that don’t want to commit to using online banking or setting up a specifi c direct debit arrangement. It will then be possible to write out a cheque for the VAT that is due and take it to the bank with a pre-printed giro slip from a book of slips that can be ordered from HMRC. HMRC recommend ordering bank giro paying-in slips in advance as it will take several weeks to be printed and sent out. They can be ordered through a form on HMRC’s website or by telephoning (01702 366376 or 01702 366314) and leaving your VAT number on a recorded message system. There will be penalties for non-compliance but HMRC has indicated that it will not penalise businesses in the fi rst year. For further advice with regard to the registration process or for assistance with online VAT matters, please contact your usual MFW partner.
Set up a Direct Debit because your payments are collected automatically from your bank account on the third bank working day after the extra seven calendar days following your standard due date. You must set up your Direct Debit Instruction before you submit your next VAT return and at least two bank working days before the return is due.
It is advisable when registering to take advantage of the email reminder system so that HMRC will send you an email when each VAT return becomes due.
Since 16 December 2011, HMRC has been able to accept payments using the Faster Payments Service (FPS). Before making a payment using FPS you should contact your bank or building society to confi rm the services available to you, any daily value limits and the latest cut off times for making a payment.
HMRC COMPLIANCE CHECKS – ARE YOU COVERED?
WHETHER it’s your car, house or even your holiday, we all know that insurance is one of those things you just have to have. When it comes to other protection such as life, pet or medical cover things change. Whilst we are not required to have these insurances, very often we invest in them… just in case.
So why not make a similar investment when it comes to unexpected accountancy fees?
For two years now HMRC have changed the way in which they carry out compliance checks for a number of taxes. They introduced new legislation and processes including one set of powers covering PAYE, VAT, Income Tax, Capital Gains Tax, Corporation Tax and Construction Industry Scheme, to visit businesses to inspect premises,
assets and records and ask taxpayers and third parties for more information and documents. More now than ever we have seen HM Revenue & Customs exercising their new ‘information powers’ and making a more concerted effort to carry out compliance checks in all aspects of client affairs. During that time McCabe Ford Williams have been
offering clients a fee protection plan that covers the cost of any professional fees incurred in relation to any of these enquires.
With personal cover and business cover costing less than you might think, is this a service you could afford not to invest in? For further details of cover and associated costs please contact your local MFW offi ce.
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