AF KABINI & CO
Chartered Accountants

PAPER VAT RETURNS TO BE PHASED OUT FROM  APRIL 2010

18 December 2009

In this article:

  • Who has to switch to online VAT Returns?
  • If your turnover is less than 100,000
  • Submitting your VAT Return Online
  • Finding out if this affects you

  • Getting ready for changes

 

HM Revenue & Customs (HMRC) plans to phase out paper VAT Returns. From April 2010 you may have to submit your VAT Returns online and pay any VAT due electronically (for example by Direct Debit).

 

This article explains who is affected and when, what action you should take now, and what you can expect.



Who has to switch to online VAT Returns?

From 1 April 2010 you will have to submit your VAT Returns online and pay any VAT due electronically if either of the following applies:

  • you have an annual turnover of 100,000 or more (exclusive of VAT)
  • you register or should have registered for VAT on or after 1 April 2010 (regardless of your turnover)

If you fall into either of the groups mentioned above, you will have to file all your VAT Returns online (including nil and repayment returns) even if your turnover drops below 100,000 in the future.
 

Exemptions from doing your VAT online and paying VAT electronically

You won't have to submit your VAT Return online or pay your VAT electronically if either of the following applies:

  • you're subject to an insolvency procedure but if you're subject to an approved Voluntary Arrangement you may file online if you want to
  • HMRC is satisfied that your business is run entirely by individuals who have a religious conscience objection to using computers

If your turnover is less than 100,000

You currently don't have to submit your VAT Return online and pay VAT electronically if you registered for VAT before 1 April 2010 and your turnover stays below 100,000. You will still be able to submit your VAT Return on paper but this may change in the run up to 2012.


You might want to switch to using the online service sooner - it will save you time and, in most cases, will give you extra days to submit your return and pay the VAT due.


Submitting your VAT Return online

The online VAT Return is very similar to the paper version and there has been no change to the rules on how you complete your return or how you calculate VAT.

 

Also, you won't have to change your existing record keeping system - you can still keep your records on paper if you prefer.

 

Signing up to do your VAT online is straightforward and you don't have to be a computer expert to be able to file your VAT Return online.

 

You don't need to have the latest hi-tech computer or have broadband. VAT online services are designed to work well with a dial-up connection.


Click here for more information of how to sign up to use the VAT online services

 

Finding out if this affects you

If your annual turnover is 100,000 or more on 31 December 2009, HMRC will send you a letter in February 2010 telling you that you have to submit your VAT Returns online and pay your VAT electronically.

 

Getting ready for the changes

If you think you will have to submit your VAT Return online from 1 April 2010, you should take the following action now:

  • Identify your preferred form of electronic payment (eg Direct Debit, Internet banking) and set up the necessary arrangements.
  • Register and enrol for the VAT online service
  • Talk to your accountant if they will be submitting your VAT Return online on your behalf and discuss what you both need to do.
  • Consider whether you need to change any of your business processes for checking and signing off your VAT Return.

How we can help

If you would like more information about any of the topics covered in this article, please feel free to contact us.

Telephone: 020 8964 4420

E-mail: info@kabini.com