Business News

December 2011

VAT rule-breakers given until the end of December

Unregistered businesses trading above the VAT threshold have until 31 December to get their tax affairs in order or face penalties and prosecution, HM Revenue & Customs (HMRC) has warned.

HMRC launched a crackdown on VAT rule-breakers in the summer, in which offenders were offered a special plan to put right their tax affairs. However, the chance to participate ended on 30 September – since then the tax body has been identifying those who did not come forward.

The campaign focused on businesses trading above the VAT threshold of £73,000 a year, but which hadn’t registered for VAT. According to HMRC, more than 40,000 letters were sent out to suspected VAT rule-breakers throughout July and August, in an effort to encourage people to come forward and register.

Under the initiative, those who have notified HMRC of their intention to take part must register for VAT by 31 December 2011. They will then receive their VAT registration number and instructions on how to complete their first VAT return. Once this has been submitted most will face a penalty of 10 per cent on the VAT that has been paid late.

“Those who have told us of their intention to disclose have until the end of December to register for VAT,” said HMRC’s head of campaigns Marian Wilson.

“We are determined to ensure everyone pays their share and, since September, have begun identifying people and companies who we believe are trading above the VAT threshold but have not come forward. We will be targeting these groups early in the new year.

“I urge anyone with unpaid tax to use it to come forward and avoid potentially lengthy and costly investigations,” she added. “The penalty they pay will still be lower than when HMRC catches up with them.”

LINK: Register for VAT online