Penalties for failure to register for online VAT returns

OWNERS of VAT registered businesses who are due to submit VAT returns on or after 1 April, but have not yet registered for submitting their returns online, face a penalty of up to £400 from Her Majesty’s Revenue and Customs (HMRC), warns business advisers PwC.

From 1 April 2012 all VAT registered businesses in the UK are required to submit their returns online and pay any VAT due electronically, with two exceptions – where a business is subject to insolvency procedures or where religious beliefs prohibit the online activity.

Those who are not exempt but continue to file VAT returns on paper face penalties from £100 to a maximum of £400, depending on business turnover.

There are five pieces of information required to register for online VAT returns – VAT registration number; principal place of business; date of registration for VAT; final month of last VAT return submitted; and the box 5 figure on the last return submitted. A business owner can find this information on their VAT4 form, on their most recent VAT return and on the HMRC letter advising businesses of the 1 April deadline.

Denise Heaney, senior tax manager at PwC’s Linen Green office, recommends local businesses don’t leave it to the last minute to register for online VAT returns:

“If any of the information is not readily available, HMRC can be contacted via the VAT helpline. However, we expect HMRC to be particularly busy as the deadline draws nearer and there could be delays in obtaining the required information.

“We advise business owners to ensure they complete the registration well in advance of 1 April 2012 to be able to submit their next VAT return online. Falling foul of the online submission requirements can subject businesses to penalties which will do nothing to help cashflow.

There are a number of ways of making electronic payments, such as BACS. But businesses are reminded that these types of payment may take approximately three to four bank working days to reach HMRC’s bank account and late payments will attract a penalty. 


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