VAT registered businesses are being urged to get ready for major changes to VAT return filing and payment starting on 1 April 2010.
HM Revenue & Customs (HMRC) has sent a leaflet to all 1.9 million VAT registered businesses to alert them to the fact that from next April those with an annual turnover of £100,000 or more (excluding VAT) will have to file their VAT returns online and pay their VAT electronically.
Under the changes, businesses registering for VAT on or after 1 April 2010 will also have to file their return online and pay electronically, whatever their turnover.
To file a VAT return online, businesses new to HMRC's online services need to register for the VAT Online service by visiting www.online.hmrc.gov.uk, clicking "Register" under the "New user" section and then following the instructions. Current HMRC online service users can add VAT Online to their portfolio in the "Services you can add" section of "Your HMRC services."
HMRC's Stephen Banyard said:
"Filing your VAT return online has a number of benefits: it's secure, convenient, does arithmetical checks and calculations for you, and provides you with an immediate online acknowledgement that your online return has been safely received by us.
"So, if your turnover is £100,000 or more, and you're not already filing your VAT return online, sign-up now for VAT online services - that way, you'll avoid a last-minute rush, and be able to enjoy the benefits of online filing sooner rather than later."
HMRC will also be sending formal letters, in February 2010, to all existing businesses affected by the new online filing and electronic payment requirements, confirming that in future they must file online and pay electronically. And, from 1 April 2010, a letter explaining the requirement to file online will be included in all registration packs issued to newly registering VAT businesses. Both letters will be accompanied by a handy guide on registering for VAT Online.
Further help and advice, including an online demonstrator and a step-by-step guide to filing online, is available on HMRC website, or by calling its VAT helpline on 0845 010 9000 (available between 8am and 8pm, Monday to Friday).
Note: the HMRC mailing to VAT registered businesses also carries a reminder of two other changes coming into effect in 2010 - the reversion of the standard rate of VAT on 1 January 2010 to 17.5%, and changes to EU cross-border VAT rules.
** Additional Information & Advice **
Depending on your circumstances, however, it may be a good idea to speak with a solicitor who specialises in tax law. You can be matched with a solicitor for free via solicitor matching services, which can also help you to understand the best course of action for your situation and whether you are ready to hire a solicitor.
VAT Rate Will Return To 17.5% From January 1, 2010 (FindLaw - August 25, 2009)
UK VAT Rate: Government Announces 15% Rate Will Extend Into 2010 (FindLaw - November 4, 2009)
VAT Rate May Increase To 20% In 2010 (FindLaw - November 20, 2009)