Lambert Chapman LLP's Mark Pearson looks at registering for Online VAT returns

For some time HM Revenue and Customs have indicated that they planned to phase out the usage of paper based returns for PAYE and VAT. For VAT purposes from 1st April 2010 if a business has a turnover excluding VAT of more than £100,000 future VAT returns will need to be submitted electronically and monies paid through online banking arrangements or by direct debit. The first quarter that will be affected by these changes is 30th June 2010. 

Any business that registers for VAT from 1^st April 2010 will have to submit the return and payment electronically. Once a business is on the scheme it cannot escape even if its turnover falls below £100,000.  Businesses currently registered but with turnover of less than £100,000 can still submit paper returns. However, this may change by 2012.

Although it is not compulsory for a business to submit a VAT return electronically if its turnover is below £100,000 there may be advantages of filing the returns online. For example it may save time and avoid a visit to the post box, it could be more convenient as forms can be filed by day or night.  

But by far the greatest advantage of paying electronically is HM Revenue & Customs allowing a further seven days credit. This extra period of credit is not new and a number of clients have benefited for some time from these additional days. On top of this if you choose to pay by Direct Debit you will receive a further three days taking it to ten days after the end of the period’s previous payment date.

As an example, a 30 June 2010 return period would previously have to be filed by 31 July if the payment was by cheque. By paying electronically the return and payment needed to be filed by the 7^th of August.

Under the new scheme by utilising an online facility the dates will automatically be moved from 31 July to 7^th August. If the Direct Debit option is taken the form must be filed by the 7^th August and the payment will be taken on the 10^th August.  

In subsequent periods the 10^th day of the month might not be a working day. If this is the case the monies will be taken from your account under the direct debit scheme on the first working day after the 10^th day of the month.

If your require any further information regarding registering for VAT online please do not hesitate to contact our office on 01376 326266.

Date:15 February 2010

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