HM Revenue & Customs (HMRC) has launched its latest VAT campaign aimed at VAT rule-breakers. HMRC will be sending out 40,000 letters to businesses that they believe should be registered for VAT.
The campaign is open to businesses that:
• have failed to register for VAT (current VAT registration threshold £73,000); or
• wish to disclose any other tax arrears.
To entice disclosure, HMRC will reduce any penalty that may be due. Businesses have until 30 September 2011 to register with HMRC that they wish to make a disclosure. Businesses will then have until 31 December to make the disclosure and pay any VAT due.
This represents two opportunities for you, your business or your clients. Firstly even if you have not received a letter asking you to register for VAT, you may have a liability to do so, the chance of a reduced penalty must be taken. For details of VAT registration and to see if you are liable to register please view ACCA’s Guide to VAT registration, below.
Secondly, business must take this opportunity to clear any tax arrears, the reduced penalty enough of an incentive to disclose.
It may be time to perform a health check to weed out any issues.