News Story
02 Mar 2010
Online VAT Filing Starts
By
Question:
Are all businesses required to file their VAT returns online from April 2010 ?
Answer:
Businesses that meet the new rules for online VAT filing are being sent letters by HM Revenue and Customs (HMRC) informing them of the changes.
Under the new rules, businesses that have an annual turnover exclusive of VAT of £100,000 or more, and all businesses newly registered for VAT on or after 1 April 2010, regardless of their turnover, will need to submit their returns and payments electronically as from 1 April 2010.
Once a business has to file online, it must carry on doing so even if its annual turnover dips below the £100,000 mark later on. The requirement to file electronically will also cover any nil and repayment returns.
For those businesses that do not fall into either category, the option to submit paper returns and to make payments by post stays in place, although the arrangement is to be looked at again between now and 2012.
New businesses without a full year's VAT history may be told that they will have to submit online if HMRC calculates that their turnover will be more than £100,000. This means that some businesses which have not yet reached the £100,000 turnover threshold could still be told to file electronically.
The eVAT system has many benefits for small business. If you file your return online and also pay your VAT liability by direct debit HMRC allows you a 7 day extension for filing. It will then be a further 3 days before the payment comes out of your bank account. This 10 day extension is a substantial cash flow benefit to many businesses.
Other advantages of eVAT are:
· The process is simple and very user friendly
· You will not need to file any more paper VAT returns by post
· You will get an on-screen acknowledgement confirming submission of your return
· You will receive email alerts to keep you up-to-date on developments that affect your specific type of business
· You can make amendments to a VAT registration online
You should note that the 7 day extension relates to calendar days, not working days. Therefore you should give the filing day some consideration at statutory holiday times.
The advice in this column is specific to the facts surrounding the questions posed. Neither FPM Accountants LLP nor the contributors accept any liability for any direct or indirect loss arising from any reliance placed on replies.
