Are you already filing your VAT returns online? If not, then you need to prepare to switch to online filing as this will be compulsory for all VAT registered businesses from 1 April 2012. Don’t leave this task until the last minute as it can take a few weeks to receive the unique user ID you need from the Tax Office.
You will also have to create a password and set up a system to pay the VAT you owe.You will no longer be able to pay the VAT due by cheque. You have to pay by electronic means. This includes using a direct debit, bank-transfer such as CHAPS or BACS, a personalised bank giro payment slip paid in at a bank (these need to be ordered in advance), or a debit card or credit card over the internet.The good news is that Tax Office has now instructed its bank to accept tax payments by the faster payment service. This means the tax or VAT due will take less than a day to clear from your account to the Taxman’s bank account.
Before relying on this shorter timescale, check whether your bank account is set-up to use the faster payment service and if any money limits apply. Many bank accounts can only pay out up to £10,000 by electronic payments in one day.
If your VAT bill exceeds that cap you may have to spread the payment over several days, or talk to your bank about other transfer methods.We can file your VAT electronically on your behalf once you have completed the necessary authority forms from HMRC.
We will also require all your VAT information in good time before the due date for the VAT return, so we can calculate the VAT due and tell you what to pay to ensure the return and payment is received by HMRC before the deadline.
_ As most of you know, 31st January, 2012 is the 2010/11 online deadline for filing individuals’ and partnerships’ tax returns. The deadline for filing in paper form was 31 October 2011.
The difference in filing deadlines for paper and on-line submissions needs to be considered. As the examples below will show, if you are not one of our clients, it may be better to instruct us to file on-line for you and pay our fees out of the penalty you have saved.
Under the new penalty regime that applies for the first time this year, if a return is filed late the following penalties will be charged:
Let me give you a few examples of the penalties payable. I am assuming that the taxpayer has no tax to pay:
2010/11 tax return filed on 1st March, 2012 –
£100 penalty if filed online; £390 penalty if filed by paper.
2010/11 tax return filed on 1st May, 2012 –
£110 penalty if filed online; £1,300 penalty if filed by paper.
2010/11 tax return filed on 1st August, 2012 –
£1,300 penalty if filed online; £1,300 penalty if filed by paper.
2010/11 tax return filed on 1st November, 2012 –
£1,300 penalty if filed online; £1,600 penalty if filed by paper.
These examples show that, as a result of the £10 per day penalties, on-line filing penalties start to increase after 1st May, 2012. Anyone filing a paper return after 1st February will incur high late filing penalties.
Licenced Accountant in Brighton