HMRC VAT non-return campaign

HMRC is to launch a new campaign against businesses which have failed to submit their VAT returns.  Up to 50,000 will be targetted.

HMRC will be targeting businesses that have been identified as not having made a VAT Return by the due dates. They will compare information from various sources and will target those who should have sent in a return but have failed to do so. HMRC may carry out checks into your tax affairs or use legal powers to get detailed information about your finances.  If you are found to owe VAT you may face higher penalties than if you come forward voluntarily. You may even face a criminal investigation.

If you are registered for VAT but have not sent in all of your VAT Returns, you may not be paying the right amount of tax. The VAT Outstanding Returns campaign is an opportunity for you to bring your VAT Returns  and payments up to date. To take advantage of the best possible terms you must complete and submit your returns by 28 February 2013.

If your VAT Returns are still outstanding after 28 February, your tax affairs will receive closer attention from HM Revenue & Customs.

Virtually all VAT-registered businesses must submit their VAT Returns online and pay any VAT due electronically.

So what action should you take? 

Bring your VAT returns up to date before the deadline. Not submitting your VAT Returns is an offence. If you have underpaid VAT because your returns are not up to date, you may have to pay a default surcharge, a penalty, or both on top of the VAT you owe. If  you submit your return to HMRC now you will get the best terms available.

What if you can’t pay the outsanding amount? 

Bring your returns up to date and pay what you can.  You should then contact the Business Payment Support Service on 0845 302 1435 and explain the circumstances.  You will attempt to negotiate a Time to Pay agreement to settle the outstanding amount over a specific period.  There is no guarantee that an agreement will be reached, as it must be justifiable.  The agreement will also be subject to the condition that you agree to make timely returns in the future and no further defaults occur.

HMRC will add a nominal interest charge on the balance outstanding.  The default surcharge can range from 2% to 15% of the amount of unpaid VAT, but there may also be a penalty payable.

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