From April 2012 online filing for VAT will become compulsory for all UK businesses. Companies with a turnover in excess of £100,000 and newly registered businesses have been forced to file online since April 2010. Paper VAT returns and manual payments will no longer be accepted by HM Revenue & Customs.
According to HMRC the new compulsory online filing system will produce a number of benefits for businesses. All VAT returns which are filed online will receive an automatic acknowledgement of receipt. The return, once submitted will also be checked for any errors which may have occurred in the VAT return. An email will also be issued on a quarterly basis to act as a reminder that the next VAT return is due to be submitted, which will hopefully reduce the number of penalties received for late filing.
The new compulsory filing system has attracted some negative comments, as all UK businesses including sole traders will be forced to submit their VAT return online. This may require increased knowledge of technology and may require software to deal with the online submission. Payments must also be made electronically, which will mean that any payments that aren’t made in a timely manner will attract penalties and maybe, interest payments.
HMRC state that there are a number of positive elements to online filing, which include the improved accuracy rate as there are automatic calculators to reduce errors. The system is reliable as your VAT return won’t be delayed or lost in the post, avoiding late filing penalties.
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.