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Our Latest VAT Updates

VAT RETURNS AND PAYMENTS

Currently, any business which registers for VAT is required to file their VAT returns on-line and to pay any VAT due electronically. This has been the position since the 1 April 2010.

As from this date, any existing VAT registered business whose turnover is £100,000 or more has also been required to submit returns and make payment on-line.

As from April 2012 H M Revenue and Customs ("HMRC") is requiring all remaining VAT registered businesses (i.e. those whose turnover was below £100,000 as at the 31 December 2009) to also file returns on-line and to pay VAT due electronically. Businesses which are in a regular repayment situation, such as farmers etc, will also be required to file on-line.

This may cause problems for smaller businesses and those who have not got access to the Internet or who are unfamiliar with it's' operation, but unfortunately the change is mandatory.

It is possible for these businesses to nominate an agent to submit electronic returns on their behalf, and the procedure is explained more fully on the HMRC website at www.hmrc.gov.uk/vat.

In order to avoid overloading the system HMRC is advising businesses to look at registering on-line as soon as possible.

INTRASTAT

If you currently file Intrastat returns you also need to be aware that paper versions of the forms are being phased out, again with the view that all Intrastat declarations will have to be made electronically with effect from April 2012. Also, the filing deadline will be changed from that date.

Currently, Intrastat returns are filed at the end of the month following that in which there is EU trade to declare. So the return for April would be filed by the end of May. This date is to change to the 21^st of the following month, so April trade, for example,  must be reported by the 21 May. Businesses may need to make changes to their accounting systems to take account of this prospective change.

FLAT RATE SCHEME

HMRC has now agreed that the receipt of bank interest may be excluded from turnover when calculating tax due under the Flat Rate Scheme.

They have made no comment on the position where a business has been including interest as turnover in their calculations historically. There should be grounds for recalculating any tax due and making an adjustment in the VAT account of the next VAT return due or a separate voluntary disclosure, depending on the amount of tax involved. Any adjustments are subject to the current 4 year cap on the correction of errors.

NOT FOR PROFIT SPORTS CLUBS

In the recent case of the The Bridport and West Dorset Golf Club the Tax Tribunal ruled that fees paid by visitors (in this case, "green fees") were exempt from VAT as the fees clearly related to the participation in sport by individuals and the income formed an integral part of the overall income of the Club. HMRC has Appealed this decision to the Upper Tribunal and a new hearing date is awaited. Another golf club, Chipping Sodbury Golf Club, is also challenging HMRC's interpretation of the VAT rules, and this case is likely to be heard shortly.

These cases have implications not only for golf clubs but for any non-profit making sports club who is currently accounting for VAT on their non-membership income. Clubs should be considering making a retrospective claim if they have not done so already.