ON LINE VAT FILING COMING SOON!
HM Revenue and Customs (HMRC) has announced plans to make online value-added tax (VAT) filing, payment and registration mandatory in the coming year.
From April, 2010, online filing of VAT returns and electronic payment became compulsory for all newly established businesses (regardless of turnover) and all existing businesses with a turnover of over GBP100,000. The decision to mandate the remaining businesses to do so was confirmed in the March Budget. In addition, in 2012, HMRC intends to introduce an enhanced and streamlined online service for VAT registration and deregistration.
"VAT: consultation on the next steps for moving VAT online" opened on August 8. It includes proposed legislation and seeks views on how to ensure and enhance assistance for those having difficulty moving online. Under the current rules, businesses with a turnover of less than GBP100,000 can still choose how to file their VAT returns.
Under the plans, it will become a legal requirement to file these online, irrespective of the size of the business in question. According to the consultation document, online filing provides speed, security and convenience for customers and efficiency benefits for HMRC.
The consultation also states that HMRC's experience so far shows that those early mandated customers have demonstrated good compliance, with few practical problems encountered and a faster than expected take-up noted. In addition, of the 750,000 existing businesses left out of the initial phase in the scheme, 400,000 have thus far chosen to move to online filing.
Robert Ellis of Ellis & Co Chartered Accountants states:
“Once in force, the new rules will require online filing for all accounting periods starting on or after April 1, 2012, with any VAT due to be paid electronically from the same date. HMRC will write to the businesses affected in February next year, explaining the changes and their impact. In addition, HMRC is to offer a period of grace to those experiencing difficulty in moving online, and will not penalize those who fail to do so within the first year”.
An online registration, variation and deregistration service is also intended to become available from October, 2012. This, HMRC says, will make matters easier on both sides, and drive down costs.
If you need more information or would like to talk the implications through for your business please contact Ellis & Co here.
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