My Bookkeeping Online Blog

If you have a VAT registered businesses with an annual sales of more than £100,000 (net of VAT), or you registered your business for VAT after 1 April 2010, new legislation now requires that the business files its VAT returns online, and pays its VAT electronically.

Such VAT registered businesses must now file their VAT returns online by 7^th day of the second month after the end of the period, or face fines, HM Revenue & Customs (“HMRC”) has warned. This legislation starts for all quarters starting on or after 1 April 2010. Thus if your normal VAT quarter is April to June, the 2010 return must be filed online, and by 7^th August.  

HMRC are saying that the “vast majority” of businesses affected by the new arrangements have already enrolled for HMRC’s VAT Online service and many have also filed their first returns online – which good news – but it you haven’t enrolled yet, you need to take action now. The link to the enrolment service is HMRC’s VAT Online service, or you could get your accountant to do it for you.

If your business is VAT registered, but has sales of less than £100,000, the requirements do not apply as yet. However, I would recommend you do it anyway. The process is more efficient, and you get an extra 7 days to file, and an extra 7 days to pay. If you do not file online, the deadline continues to be the end of the month following, therefore 31 July for the April to June quarter.

Businesses that miss the filing and payment deadline will get fined a surcharge, which will be an escalating percentage of the outstanding VAT liability, depending on how many times the filing and payment has been late in the past.

One final thought. If you set up to pay your VAT by direct debit, you get three extra working days before the money is taken from your account (beyond the 7 extra calendar days you get for filing online) and the benefit of not having to remember to make the payment.

Categories:Financial, Running a Business from Home, Small Business Help, Start ups