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Outstanding VAT returns?

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Time to remove heads from the sand…

In these tough economic times many businesses may have been tempted not to submit their VAT returns, but to pay the assessment generated automatically instead, which is often much lower than their true VAT liability. HM Revenue & Customs’ latest campaign aims to target this untapped revenue, and businesses not getting their returns in order may suffer even higher penalties.

Businesses have until 28 February 2013 to submit any outstanding VAT returns and pay the tax due. Any which do not, risk an HMRC investigation. Legal powers will be used to access information on finances. If it is established that more VAT is owed than has been paid, HMRC can apply much higher penalties. Where the amount owing is significantly higher than the amount paid, it may be treated as fraud and businesses could face criminal investigation.

Now is the time to get record-keeping and VAT returns up-to-date. If more than one VAT return is submitted late then default surcharge will apply to the amount due – this increases with the number of returns rendered late within a 12-month period, from 2% to 15%. However, submitting them before the 28 February will help to minimise or avoid the additional penalties threatened in HMRC’s campaign.

For those unable to pay the VAT due, HMRC have considered time topay arrangements, but on a case-by-case basis and normally only for a short period. Current VAT returns would still need to be rendered and paid – they would not normally allow on-going credit arrangements. If you have problems with customers not paying you, check whether you can claim VAT bad debt relief, or operate one of the special accounting schemes which can help small businesses by changing when or how much you pay. “Cash accounting” is particularly useful as you only pay the VAT on supplies for which you have been paid.

For more information or assistance contact Tracy Booth on 01227 768231.
 




Author:Reeves

Source:http://www.reeves.co