Registering for VAT online is easier, more secure and faster than using a paper form. As well as avoiding postal delays, the online system provides on-screen help and you get an immediate on-screen acknowledgment that HMRC has received your application.
If you apply for VAT registration online, HMRC will also enroll you automatically for its VAT Online service, so you can submit VAT Returns online. In addition, your certificate of registration will be available to you online.
HMRC has also revamped its VAT Online service so that it now offers a new variation service – allowing businesses to change their VAT registration details – and a new online de-registration service, for businesses who want to cancel their VAT registration.
HMRC’s Gill Evans said: ”Around four out of five new businesses already register online for VAT. ”VAT returns must be submitted online, and payments must be made electronically, so it makes sense to get online at the first stage of the VAT process, by registering via our website.”
Under the time-limited opportunity, direct sellers – often called agents, consultants, representatives or distributors – must tell HMRC about the tax due and make arrangements to pay before 28 February 2013. Direct selling involves selling directly to customers and taking commission on sales without the need for a shop. It can involve demonstrating a product in a customer’s home or selling at a party. Some agents sell door to door, and many use catalogues.
HMRC will be writing to direct sellers to let them know about the Direct Selling campaign. After the 28 February deadline, HMRC will begin contacting direct sellers who did not come forward to take part in the opportunity, if HMRC believes they owe tax.
More than 600,000 businesses have to put in VAT returns each month and most do so on time. But in a new campaign some 50,000 will be warned that, from 28 February, their tax affairs will attract greater attention.
The VAT Outstanding Return campaign is aimed at businesses that have one or more VAT return outstanding, and have been told to submit their returns but have not done so. Some will have received an assessment of VAT for these periods.
These businesses are being given an opportunity to get up to date and pay the tax they owe by 28 February. After that, HMRC will target them and take a much closer look at their tax affairs. By using this campaign to come forward voluntarily, they might receive better terms, as any penalty they pay may be lower than if HMRC comes to them first.
Marian Wilson, head of HMRC Campaigns, said: “If HMRC has sent you a VAT return and you have not yet taken any action, this campaign is a reminder to bring your tax affairs up to date. But time is running out.
“After 28 February, if they have not submitted their outstanding VAT returns and paid what they owe, HMRC will use its legal powers to pursue outstanding returns and any VAT that is unpaid. Penalties, or even criminal investigation, could follow. ”
People can take part in the campaign by:
- Completing and paying any outstanding VAT returns immediately
- Telling HMRC if they have stopped trading or have changed their business details.
The Alternative Dispute Resolution (ADR) is a pilot for small and medium enterprises. It uses independent HMRC facilitators to resolve disputes between HMRC and customers during a compliance check but before a decision or assessment has been made. ADR aims to find a fair and quick outcome for both parties, helping to reduce their costs and avoid a tribunal.
The pilot in North Wales and the North West follows a successful trial earlier this year, where 60 per cent of disputes were either fully or partially resolved.
HMRC’s, Jim Stevenson, assistant director, local compliance, said:
“ADR will help SMEs resolve disputes without having to go to a tribunal – saving them both time and money. It is a good opportunity for HMRC to work together with our customers to potentially resolve disputes much earlier than at present.
“The facilitators are HMRC members of staff who have been trained in ADR techniques and have not been involved in the dispute.
“We have found that often there are communication problems. So the HMRC facilitator will help all parties reach a shared and full understanding of the disputed facts and arguments. They will also ensure there is good communication, and help explain what each side is trying to say to the other. The aim is to resolve the dispute or, if not, as many issues as possible.”
ADR does not affect existing processes or review and appeal rights, and covers both VAT and direct taxes.
The Chartered Institute of Taxation (CIOT) has welcomed the announcement by HM Revenue and Customs (HMRC) that they will be trialling a new way of resolving disputes between small businesses and the taxman over the next six months.
Andrew Gotch, chairman of the CIOT’s Owner Managed Business Sub-Committee, said:
“This is a welcome move. ADR has the potential to be a valuable Gordian knot-cutter in investigations and technical disputes that have run into the sand. Anything which can help resolve disputes between HMRC and taxpayers to mutual satisfaction without the need to resort to expensive and time-consuming litigation has to be good news for all sides.
“There has already been a small-scale pilot of this new technique, using a few hand-picked cases which had already reached the stage of an appeal against a decision. Under this new trial, cases will be accepted at an earlier stage, where no appeal has yet been made, which is sensible. Additionally, taxpayers and their advisers will also be able to put cases forward for ADR, whereas in the first pilot HMRC did the selecting in most cases.
“It is very important that HMRC are able to gather reliable data from this next stage in the ADR pilot, so that an informed decision can be made as to whether the facility should be extended nationally. So, even though at this stage only those in some parts of the country will be able to participate, I would encourage all small businesses and their tax advisers who can take advantage of the facility to consider using it in situations where there are intractable disagreements with HMRC. This is an entirely voluntary process, from which neither side can possibly emerge worse off. In fact, evidence from the earlier phase of the pilot suggests that participants usually emerge far better off either in terms of getting a solution or understanding each others’ positions better, thus saving stress, time and costs all round”.
From 1 April 2012, all VAT-registered businesses must send their VAT returns online and pay their VAT electronically. Currently, only newly-registered businesses, and those with turnovers of more than £100,000, have to file and pay their VAT online.
The new rules will cover VAT returns filed for accounting periods beginning on or after 1 April 2012.
To file your VAT return online, you’ll need to register for HMRC’s VAT Online Service – visit www.online.hmrc.gov.uk and click “Register” under the “New user” section. Then follow the instructions.
Affected businesses will also need to set up their preferred electronic payment method. Visit www.hmrc.gov.uk/payinghmrc/vat.htm for more information on the various options.