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Tax Tip

The VAT Initiative Campaign. July 26 2011

The VAT Initiative campaign is an opportunity for businesses to tell HMRC, between now and 30 September that they should be registered for VAT. It is aimed at businesses that:

• have already passed, or are expecting to pass within the next 30 days, the current VAT threshold of £73,000
• have passed the VAT threshold in a previous 12 month period but did not register for VAT
• would like HMRC help to register now
• want to take advantage of a reduced penalty

You must register for VAT if any of the following applies:

• your VAT taxable turnover for the previous 12 months is more than £73,000 (the current VAT registration threshold)
• you think your VAT taxable turnover will exceed the threshold in the next 30 days
• you exceeded the VAT threshold at an earlier point in time and have not registered for VAT
• you take over a VAT-registered business as a going concern

Not registering for VAT when you have exceeded the threshold is an offence and, in addition to the VAT due, there may be penalty charges. If you tell HMRC voluntarily under the VAT Initiative before 30 September you will incur a lower penalty than if HMRC have to enforce your registration. In some cases, there will be no penalty charge at all. You may also be able to spread the length of time over which you have to pay HMRC rather than paying in one lump sum.

Important dates to note:

• 30 September 2011 - the last day you can notify HMRC that you want to take part in the VAT Initiative
• 31 December 2011 - the deadline for returning your completed VAT registration form (VAT1) to HMRC

Tonmoy Kumar, Manager of the Accounts Department of ABDS says:

”Once your business is VAT registered, you can usually reclaim any VAT that you pay when purchasing goods, supplies or services for use in the business. Being VAT registered may also raise the credibility and status of your business with potential customers.”

If you need any help and advice with your Tax compliance, contact Lavinia Newman, Stuart Coleman or Tonmoy Kumar NOW to discuss how ABDS can help in all your financial planning and business advice.

ABDS Chartered Certified Accountants of Southampton.
Tel: 023 8083 6900  E-mail: abds.marketing@netaccountants.net
 

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