VAT amnesty for businesses

Firms trading above the VAT threshold but yet to register are being offered the chance to avoid penalty - providing they sign up by 30 September - under a new scheme launched by HM Customs & Excise.

Firms trading above the VAT threshold but yet to register are being offered the chance to avoid penalty – providing they sign up by 30 September – under a new scheme launched by HM Customs & Excise.

UK businesses generating turnover in excess of &£56,000 are legally obliged to register for VAT, however, Customs & Excise estimates that between 150,000 and 200,000 firms are currently failing to meet this responsibility.

Usually, firms that register late, regardless of reason, are required to pay a belated notification penalty (BNP) – a fee that is calculated as a percentage of tax arrears. Between 30 May and 30 September though, any business that applies to register and provides Customs & Excise with the necessary information will avoid punishment.

“There could be various reasons they’re not registered” explains Customs & Excise spokesman Gary Jones. “Their turnover may have crept over the threshold without their noticing, they could keep meaning to register only to be distracted by their day job or they could be choosing not to register deliberately, regardless of the reason they will be spared having to pay BNP.

Firms will still be required to pay their VAT arrears in full, yet Jones says “we will try to be flexible on a case-by-case basis, perhaps allowing businesses to pay them off over a longer period”.

To take advantage of the scheme or for further information contact the Customs & Excise national advice service on 0845-010 9000 or visit: .gov.uk’s VAT registration page

For more information on tax matters, check out our Tax and VAT section.

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