New rules will come into force in April regarding how VAT returns are submitted and payments made.
From 1 April, online filing of VAT Returns, plus making payments electronically, will be compulsory for businesses meeting the following criteria:
o the business has an annual turnover of £100,000 or more .
o the business has registered or should have registered for VAT on or after 1 April 2010.
Businesses already registered with a turnover below the threshold can still choose to use paper returns, however this will be reviewed by 2012.
The following penalties will be imposed for those failing to make an electronic return:
o turnover of £100,000 (VAT exclusive) and below - £100.
o turnover of £100,001 to £5,600,000 - £200.
o where turnover exceeds £5,600,000, penalties will be higher.
HMRC has said it will be lenient during the first year of compulsory online filing, to allow businesses to adjust to the changes in procedures. This means that initially, penalties will not be imposed. However, penalties will apply where a business that should have filed online submits a paper return for a period ending on or after 31 March 2011.
What to do now:
1. Make arrangements with the bank for your preferred form of electronic payment.
2. Register for online filing ASAP.
3. If Champion are submitting your VAT return online on your behalf, contact your local office and we will explain the steps that each of us needs to take.
Blackpool 01253 621512
Chester 01244 404420
Manchester 0161 7032500
Preston 01772 735000
Southport 01704 535687
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