Online VAT returns made compulsory for small businesses

The government has confirmed that, subject to two exceptions, mandatory online filing of VAT returns will be extended from 1 April 2012. Currently, only businesses with an annual turnover of £100,000 or more must file VAT returns online. All VAT registered businesses will now need to file VAT returns online for VAT accounting periods beginning on or after 1 April 2012.

Exceptions to mandatory online filing

  • Individuals who are subject to certain insolvency procedures.
  • Individuals whose religious beliefs are incompatible with the use of electronic communications.

Penalties for failing to file VAT returns online

Individuals that are required to file returns online, as a result of the removal of the £100,000 threshold, will only be liable to a penalty for failure to file online for VAT accounting periods ending on or after 31 March 2013.

VAT must be paid electronically

If a VAT return is required to be paid electronically, the VAT payable to HM Revenue & Customs must also be paid electronically.

More information

If you have any questions about the content of this article please contact our Business Law Team.  

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