Chiene + Tait today issued an alert to all businesses regarding VAT registration. HMRC has a 30th September deadline for all businesses that should be VAT registered to notify them, otherwise the full weight of penalties will be issued.
If a business is found to have not VAT registered when they should have, not only will the business be due backdated VAT but HMRC will also penalise the business with a penalty of up to 100% of the tax unpaid). Lynn Gemmell, Director of VAT Services explains further:
"The amnesty should act as a wake-up call to any business that has not considered their VAT position. HMRC has agreed that if a business now registers under the terms of the initiative and does so not more than 12 months after they should have done, the business will only have to pay the back tax and the penalty is reduced to nil. If registration is more than 12 months overdue, then the back tax will have to be paid along with a reduced penalty of 10%".
Lynn also highlights that if businesses have received a letter from HMRC regarding VAT registration but think that HMRC won't remember to check them, the polar opposite could be true.
"In July, HMRC sent out letters to some 40,000 businesses across the UK to say this initiative was taking place. The aim was to encourage business owners to come forward. If you received one of these letters, you have already been identified as a business of interest on the radar and worthy of further investigation by HMRC."
VAT registration can be easily misunderstood, but can be simply rectified in cases where registration is required. "Quite a lot of businesses don't really think about VAT or don't have a full understanding of the issues." Simply put, by ignoring this amnesty, businesses and also charities could be shooting themselves in the foot.
"If you have not registered for VAT and think there is the slightest chance that you may be liable, then contact your accountant immediately and ask them to go through your books and recent figures. This is a golden opportunity to take advantage of this HMRC amnesty and one which should not be missed."
Notification must be made of the business's intention to register by 30 September 2011, otherwise the favourable penalty terms will not apply. The actual registration itself must be in by 31 December 2011 - Chiene + Tait can arrange VAT registration for you. If you would like to discuss whether you should be VAT registered, please contact Lynn directly.