This Content Was Last Updated on February 9, 2017 by Jessica Garbett
HMRC have launched the VAT Initiative campaign as an opportunity for businesses to tell HMRC, between now and a 30 September 2011 deadline that they should be registered for VAT. The campaign is aimed at businesses that should have, but failed to, register for VAT.
Businesses must register if they pass the current VAT threshold of £73,000.
Businesses that have passed the VAT threshold in a previous 12 month period but failed to register are the target of this latest initiative.
Not registering for VAT when you have exceeded the threshold is an offence and, in addition to the VAT due, there may be penalty charges. If you tell HMRC voluntarily under the VAT Initiative before 30 September you will incur a lower penalty than if HMRC have to enforce your registration. In some cases, there will be no penalty charge at all. You may also be able to spread the length of time over which you have to pay HMRC rather than paying in one lump sum.
Once your business is VAT registered, you can usually reclaim any VAT that you pay when purchasing goods, supplies or services for use in the business. Being VAT registered may also raise the credibility and status of your business with potential customers.
HMRC have produced guidance to the scheme, just follow this link:
Important dates to note:
•30 September 2011 – the last day you can notify HMRC that you want to take part in the VAT Initiative
•31 December 2011 – the deadline for returning your completed VAT registration form (VAT1) to HMRC.
Please note that you cannot make your VAT registration online if you wish to take part in the VAT Initiative. You must submit a paper application – see this link to the HMRC Forms finder and type VAT 1 in the search box.