The New Year may bring misery to any small businesses and sole traders who are above the threshold for VAT and haven’t registered. HM Revenue & Customs issued letters to over 40,000 businesses and sole traders, who they believed were trading above £73,000, the current threshold for VAT.
The amnesty campaign was launched in July 2011, inviting businesses that thought they may owe VAT to come forward. The businesses were invited to come forward before 30th September last year, and those that did, had until 31st December to register to pay VAT. The businesses and sole traders who came forward would receive reduced penalties of 10 percent on any outstanding VAT, far less than the standard penalty charge.
Marian Wilson, who is the Head of campaigns at HMRC said that they had been “identifying people and companies whom we believe are trading above the VAT threshold but have not come forward.” Early in 2012 HMRC will be launching investigations to target the suspected groups. Data shows that 841 businesses expressed an interest in the campaign, with 423 registering to complete a VAT return and pay VAT owed. Only 115 VAT returns have been received by HMRC although the uptake isn’t thought to be low as a number of businesses won’t have exceeded the threshold.
According to a spokesman for HMRC the letters were issued to businesses which are trading at a level between £50,000 and £70,000, and were intended to act as a reminder of the current VAT threshold and obligations to register for VAT.
Want to learn more?
Subscribe to our newsletter to get accounting tips like this right to your inbox
About The Author
Content Writer working alongside our expert accountants to bring you the latest Tax and Accounting news.