Don’t be April Fools – Do Your Online VAT Returns
The ICAEW has urged smaller businesses to make sure that they are prepared for the 1st April deadline from when VAT returns must be filed online. Currently, only 14% of companies file their returns online but on April Fool’s Day it becomes compulsory.
From 1st April 2010, businesses with an annual turnover of £100,000 or more and all newly VAT registered businesses, must submit their VAT Returns online and pay VAT electronically. This applies to VAT returns for VAT return periods starting on or after 1st April.
Existing smaller businesses are only off the hook until next year. The government announced before Christmas that it intends to make all businesses e-file their VAT returns from 2011 – one year earlier than expected.
Anita Monteith, Technical Manager from the ICAEW Tax Faculty, commented:
“As everybody knows there have been problems with HMRC’s online processes in the past. With online filing of VAT returns becoming compulsory there is going to be a massive demand and one of the biggest problems is to make sure that everyone knows about it. HMRC wrote to all VAT registered businesses last month reminding them of the date they first registered for VAT. This is one of the key pieces of information which they will need to register online.”
To help the process go smoothly, the ICAEW has six top tips for businesses:
- You need to register with HMRC for VAT online filing, similar to the self assessment process. Do this now
- Use your activation pin code as soon as it arrives. It will expire 30 days after it was issued
- Those businesses which must e-file, must also pay their VAT electronically. They will not be allowed to pay by posting a cheque
- Keep a paper or electronic copy of your e-filed VAT return. It will be accessible on the HMRC website for only 15 months before it disappears and you may need to refer to it later
- Print a copy of the electronic confirmation
- If you have any questions or need advice, speak to a chartered accountant