Here’s a Value Added Tax (VAT) Update from Marsh Vision.
This is the first of regular ‘tax blogs’ that will be posted on the Marsh Vision website and we hope that you will find them useful. This first blog alerts you to some of the important changes to Value Added Tax (VAT) which are applicable from April 2012.
Compulsory VAT registration
- Businesses are required to register for VAT when their total sales (known as ‘taxable turnover’) for the last 12 months (or since the start of trade if earlier) exceeds £77,000 (up from £73,000).
- Where this occurs the business should notify HM Revenue & Customs within 30 days of the end of the month in which the turnover exceeds £77,000. In normal circumstances a business would then be registered for VAT from the first day of the following month.
- Unregistered businesses which are close to the £77,000 limit should monitor their turnover for the last 12 months at the end of every month and take action accordingly.
- The intention is to make on-line VAT registration compulsory from the 31 October 2012.
Voluntary VAT registration
- A person can apply to HMRC to be registered voluntarily even though the turnover is below the mandatory limit.
- Although voluntary registration allows a business to reclaim most of its input tax, it will of course be subject to the same obligations regarding accounting for VAT and submitting VAT returns as a compulsorily registered business.
- From 1 April 2012 all VAT registered businesses are required to submit their VAT returns on-line and pay any VAT due electronically.
- Further details can be found at: http://www.hmrc.gov.uk/vat/vat-online/index.htm Other
- A number of VAT changes with a view to addressing certain anomalies and loopholes concerning hot take-away food, sports drinks, chair rental in hairdressing salons and holiday caravans are to be introduced from 1 October 2012.