An estimated 1.7 million companies in the UK have yet to
register for on-line VAT filing - despite the fact they have less
than six months to do so.
Now a Birmingham based VAT consultant has said that many
companies may find that they are unable to register on-line because
of the strain it will place on HM Revenue and Customs IT
systems.
Jason Croke, VAT consultant at the Birmingham office of Haines
Watts, said businesses needed to act now if they were to stand any
chance of succeeding.
"HMRC estimates that 15% of VAT registered businesses already
file and pay returns on-line. It is reckoned there are two million
VAT registered businesses in the UK and whilst not all of these
will need to file on-line because their turnover is below the
current threshold of £100,000 per annum, it is still going to
put a lot of strain on HMRC IT systems - especially if taxpayers
choose to leave it until the last minute," said Mr Croke.
By April 2011, all VAT registered businesses, regardless of
turnover, will have to submit VAT returns on-line.
"I don't understand why businesses are being so slow to respond.
There are a number of benefits of filing on line. There are no
postal delays or cheques lost in the post. The on line system
performs basic checks to ensure figures are accurate and, a
particular bonus, HMRC allows a further seven days in which to pay
the VAT beyond the VAT return due date - so bringing a small but
valuable cashflow benefit."
However, many of his clients have reported that the registration
process can be unfriendly - as it requires details that may not be
to hand in order to finalise the registration. Staff need training
on how the on line system operates and new controls will need to be
implemented to ensure that VAT returns are submitted at the right
time, by an authorised person.
" Some businesses still don't have a computer or internet access
- just think of market traders for instance. Some may have security
concerns - but the day of reckoning will come.
"HMRC have suggested a 'light touch' to those who don't comply
and there has got to be some doubt as to whether everyone will be
able to do so if the IT systems fail.
"Like it or not though, it will be the only way to deal with VAT
in the future. Far better to implement it now than later," said Mr
Croke.