For some time now, HMRC have known the annual turnover of all limited companies, as it’s reported on their corporation tax returns. They’ve also had a list of all businesses that are registered for VAT. It’s taken a while, but they have finally compared these two pieces of information. The result? A list of over 40,000 limited companies with an annual turnover of over £73,000 (the current VAT threshold) that are not registered for VAT.
HMRC have sent letters to some of these companies asking them to consider whether they should be VAT registered. If you should be VAT registered but are late in applying for registration, you should look at taking advantage of HMRC’s VAT Initiative, but be quick – you must inform HMRC that you would like to take part by 30th September 2011. If you do this, you can take advantage of lower penalties than would usually be charged. In some cases HMRC have advised penalties won’t be issued at all.
Now that HMRC have a list of businesses they expect to be VAT registered, they have revealed that should these business not become VAT registered, they will be targeted to find their reasons for not doing so.
Here at Axel Chartered Accountants, we would advise anyone with a turnover over or approaching the £73,000 threshold in a rolling 12 month period, to contact us to look at your circumstances and assist in any actions that need to be taken. If you do need to become VAT registered, we can also advise of the different VAT schemes that may beneficial to you and your business, such as the Flat Rate Scheme, Cash Accounting Scheme and the Annual Accounting Scheme.
Contact us on 01565 755255 or via email at blog@axel.co.uk
