Get ready for electronic VAY payments
From April 2010, all businesses with a turnover in excess of L100,000 will need to file their VAT returns online and make payments electronically.
The Revenue is encouraging online transactions as a secure and controllable payment of all types of taxation. There are benefits to the tax payer, not least of which is an additional period of 7 days in which to pay VAT and the certainty of knowing when your payment will reach HMRC. An electronic confirmation of receipt also gives the payee assurance that the money has reached its destination.
At present the threshold for registering a business for VAT is L67,000. Businesses turning over an amount below this threshold can register voluntarily; small business owners need to weigh the benefits of being able to claim back VAT on purchases against the relatively small additional administrative burden.
From April 2010 it will be mandatory for all businesses with a turnover of more than L100,000 and all newly registered businesses to submit their VAT returns online. Paper filing of VAT can continue for previously registered businesses with turnover under L100,000, but only until 2012 by which time all returns will be required online. Online returns mean that payments will have to be made electronically, i.e. by BACs, Internet, telephone, or bank giro credit.
At Baker Chapman & Bussey we are expecting those of our clients who don’t already manage their VAT electronically to start doing so over the next few months, allowing time to obtain activation codes and put systems in place. The Revenue has a guide on its website to help ‘first timers’ with the system, but we are always pleased to give advice and help.
