HMRC has been running a VAT registration amnesty of sorts. They have been encouraging those trading above the £73,000 turnover registration threshold that have not registered to come forward and any fines on unpaid VAT will be limited to 10%. After 30 September 2011 you can expect little mercy if you are caught out.
Sectors that have been specifically targeted include: construction, business services, hair and beauty, hotels and catering, retail distribution, recreational services, motor vehicle distribution and repair, sanitary and domestic services, agriculture and horticulture, property and road haulage.
Normally the fines on the unpaid VAT are as follows:
|If you registered||Then the penalty rate will be|
|not more than 9 months late||5%|
|more than 9 months but not more than – 18 months late||10%|
|more than 18 months late.||15%|
You may notice that ‘limited to 10%’ isn’t a great deal given the normal rates but even if you are in the under nine months category you are likely to find a far more understanding tax agent and they might not be quite so over-zealous in trawling through your accounts looking for errors and of course if you should have registered 18 months ago that might be a choice between 15% or 10% of a very large number (take you turnover divide it by 120 and then multiply by 20 to get a rough estimate).
As always if you want to discuss this with a Chartered Accountant or want to know whether you could save money by registering for VAT then get into contact with Caprica Online.