HM Revenue and Customs (HMRC) have recently announced that they will be sending letters to over 40,000 businesses who they consider should be VAT registered, but who are not, outlining how they can register and pay their VAT. The deadline for responding is 30 September and the concession for coming forward voluntarily is a lower than normal penalty rate for late payment of VAT of 10%.
There will also be an opportunity to disclose any other tax arrears, again with a lower than normal penalty.
After the deadline, any businesses which have not come forward will start attracting closer scrutiny from HMRC.
The press release mentions “using information pulled together from different sources”, which we consider the primary place would be the accounts or tax returns of businesses. However, there may be legitimate reasons why registration is not necessary, in addition to cases where people either were unaware of their obligation to register or had deliberately not registered. If registration is required, our advice is to remain within the law and register – assuming that registration is correct. If in doubt, please contact us.