ABC North East

HMRC is reminding VAT-registered businesses that all VAT returns must be submitted online from this spring, meaning paper returns will soon be a thing of the past.

Currently, only newly-registered businesses and those with turnovers of more than £100,000 have to submit their VAT online, as well as pay electronically. Anyone else can send HM Revenue & Customs (HMRC) a paper VAT return, if they wish.

That is changing from April, when all 1.9 million VAT-registered businesses in the UK will have to submit their VAT returns online, and pay electronically, for accounting periods beginning on or after 1 April 2012.

Every VAT-registered trader not already required to submit online will receive a letter from HMRC in February, advising them of the change, and what steps they need to take.

To submit your VAT return online, you need to be registered and enrolled for HMRC’s VAT Online Service. To do this, visit www.online.hmrc.gov.uk and click “Register” under the “New user” section. Then follow the instructions.

Online filing has a number of benefits, compared to paper filing:

an automatic acknowledgement that your return has been received;
a handy sum checker; and
an email alert to remind you when your next online return is due (as, after April, HMRC will stop sending out paper returns to customers who are now required to submit online).

For details on the support available to help you move from paper to online VAT returns, visit www.hmrc.gov.uk/vat/online-return-help.pdf

Further help and advice is available from HMRC’s website at www.hmrc.gov.uk/vatonline. If that doesn’t answer your question, call the VAT Online Services Helpdesk on 0845 010 8500 (available between 8am and 6pm, Monday to Friday).

Source: (HM Revenue & Customs Press Office)

The standard rate of VAT is currently 17.5 per cent but will be increased to 20 per cent on 4 January 2011.

For any sales of standard-rated goods or services that you make on or after 4 January 2011 you must charge VAT at the 20 per cent rate. If you have a cash business and calculate your VAT using the VAT fraction you must use the VAT fraction of 1/6 on your standard-rated VAT inclusive sales from 4 January 2011.

The change only applies to the standard VAT rate. There are no changes to sales that are zero-rated or reduced-rated for VAT. Similarly, there are no changes to the VAT exemptions. Any sales you make at these rates are unaffected by this change.

For those businesses on the Flat Rate VAT Scheme the new rates can be found on the following website.

HMRC VAT Increase