Business News

7 December 2011 Businesses given one month to comply with VAT rules

Those businesses that should be registered for VAT, but have failed to register with HM Revenue & Customs (HMRC), have been given until the end of the month to complete the registration process. Earlier this year, HMRC launched a VAT initiative offering businesses that had not yet registered for VAT the opportunity to put things right.

Under the scheme, those businesses which notified their intention to make a tax disclosure must now register for VAT by 31 December. They will then receive their VAT registration number and will need to submit their first VAT return and make arrangements to pay. The majority of businesses registering with HMRC before 31 December will face a lower penalty rate on the VAT owing.

All eligible businesses which have an annual turnover in excess of the threshold (currently £73,000) must register for VAT.

Since the closure of the initiative, HMRC has been identifying those businesses trading above the VAT registration threshold but which have still not registered, and intends to target them early in the New Year. Such businesses could be subject to significantly higher penalties, and run the risk of criminal prosecution.

We can help with all your VAT planning needs – please contact us for further advice and assistance.