Have I been labouring under a misapprehension for years?
I have always paid our VAT on the 7th working day, up until about 2 years ago, with no problems.
We got into a surcharge situation (pregnancy and maternity leave, insufficient internal controls!) and are currently paying 15% for late payments. We paid our last VAT bill on 8th August, 6 working days from month end, to avoid surcharge as we had funds available, but have still been surcharged?
I have appealed and it has been thrown out - is it worth going to first tier tribunal or would I just be making an idiot of myself?
I notice on the HMRC website now there is a payment due date checking system, which also seems a new thing to me?
Any answers appreciated if only to tell me I am an idiot!
Many thanks
Replies (33)
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Working days?
Surely the deadline is 7 days after the end of the month following the end of the return period. Where do you get 7 WORKING days??
David
http://www.hmrc.gov.uk/vat/managing/returns-accounts/deadlines.htm
It is the 7th day, NOT working day.
This is pretty basic stuff ... not just knowing what the deadline is, but also being able to fire up google and search "vat return deadline". Surely before appealing, you would have done this.
I think it would be best if you used a competent book-keeper or accountant to look after your vat.
CPD
Have you never found that things have changed and passed you by?
Why is it members of professional bodies must complete CPD again?
Direct debit has advantages
I have heard no-more-than-hearsay reports of VAT direct debits going wrong - nothing proven to my satisfaction (full background facts not made known by claimants in the two alleged cases).
I therefore have confidence in the Direct Debit method for paying VAT return liabilities. As I see it two advantages accrue to the VAT registered person:
Responsibility for taking payment is shifted from the taxpayer to HMRC (taxpayer just needs to get adequate funds in bank a/c).Extra 3 days to pay beyond the 7th - ie. DD due on 10th or just a bit later
There is in fact a third option if (frowned upon!) paid by post by cheque must be cleared funds in HMRC bank a/c by 28th/29th/30th/31st whatever.
PS. Quite happy to answer your question, quite understand where you're coming from, no-one knows everything - even basic things can be peripheral to core knowledge expecially when time-out or time-off has occurred.
In defence of mrme89
If you are in 15% surcharge territory, you must be on at least your fifth default. Vague assertions about "pregancy and maternity leave" notwithstanding, that's a pretty long-running error. I could understand not knowing the situation once, but HMRC will have sent a letter after the first time. This will have detailed the due dates. Have these letters not been read?
We can't know everything, but something like due dates for payments is a not exactly into the realms of obscure knowledge. To get to a fifth default without sorting this problem out is a pretty fundamental error. To not double-check the payment due date when you knew you were already in a surcharge period is pretty careless.
Whilst mrme99's tone may have been less than tactful in pointing this out, can you present a sound reason how you, as a professional, allowed a FIFTH default to occur? Should you genuinely wish not to respond further when challenged, perhaps you should not follow that assertion with cheap shots at your challlenger.
Not the only thing that should be checked.
If you are going to address someone by name, please try to spell it correctly. Hi Stephurhan
To quote your opening post
. If you didn't feel able to take people doing just that, don't post a question saying so. Equally don't say that you don't wish to respond further and then take a dig at someone that points out you have been an idiot. Any answers appreciated if only to tell me I am an idiot!
To reiterate, you had to be on at least the fifth failure to reach 15% surcharge, possibly sixth if your turnover is low enough. Whatever the reason for missing the earlier deadlines, you only have yourself to blame for missing this one. With the stakes so high, I would not have trusted my memory on this, especially if I'd been out for over a year (implied by the fact that the previous four defaults occurred while you were away). If your appeal was solely based on your stated belief that you had seven working days to file, you really didn't have a leg to stand on.
As I see it, if you want to pursue an appeal, your only hope lies in those surcharge letters from HMRC. If you can provide some evidence that they were not received you might stand a chance. It is more reasonable for your non-accountancy colleagues to have not realised the risks of entering a surcharge period if they did not receive letters informing them of these. Getting HMRC to accept this is likely to be tough, but it is your only avenue at present. They are unlikely to entirely overturn penalties that arose when a person that should have known better was handling matters, but you might get the surcharges dropped to an earlier stage.
Don't rely on past knowledge, or assumptions
why would you check something if you think you are correct?
To make sure that you are :¬)
I agree with mrme89 & Stephurhan
Assuming you submit your VAT online, the payment due date is printed on the submission receipt, isn't it? Of course, your bespoke system may not give that information, and if not, I would put in a request for the software to be updated.
Any answers appreciated if only to tell me I am an idiot!
Someone was an idiot to allow it to happen for so long, without digging deeper to find the cause. The directors can't blame someone who was on leave. It is up to them to make sure that the replacement is competent.
Other angles
It's a case of not starting from here but you might have been able to appeal the late surcharges for the earlier, bed-bound Returns that went wonky. Not really now though.
Why not stick the thing on Direct Debit? That way you will get it taken on the 10-12th of the month and upon online submission you will get them telling you exactly when the money will be taken.
Finally the thing about the PAYE deadline not being consistent. Well yes it has changed but the old regime used to be the 19th (or the next working day if that was a weekend) and they altered this to be the 22nd or the preceding working day if that hit a weekend).
forget about extra 7 days.
I always tell people it is the end of the following month.
that way more chance of meeting deadline.
if they say there is an extra 7 days, I will say I work to end of the month, not into following month.
direct debit can be late
See this tax case where HMRC deducted the VAT late because the VAT return was filed one day late online:
The Staircase Company Ltd v HMRC TC02867
http://www.financeandtaxtribunals.gov.uk/judgmentfiles/j7390/TC02867.pdf
Was it really necessary
for all the unpleasantness that this post generated?
It was a simple enough question that could have been answered with alacrity.
Sure, the poster should have know these things and they are easily researched; but so what?
It could have been a pleasant exchange.
All that has happened is a lot of negative energy has been generated along with pompous point-scoring. And to what end? Do you feel better for it now?
And people wonder why there are wars.
An argument needs two sides
As I acknowledged in my original post, mrme99 could have been more tactful in their response. However, the OP had been foolish and admitted the right of others to call them an idiot. Their aggressive response to someone doing this is what really kicked off the unpleasantness.
This was the only reason I felt the need to step in myself. It is important to remember that those responding to queries on here are giving up their technical knowledge for no reward. When a questioner responds in a hostile manner, I'm sure there are some that wonder why they bothered. If someone with specialist knowledge decides not to answer a future query for fear of being abused for doing so, that is a loss to the community as a whole. It is to avoid this happening that I feel those that those who get a hostile response unnecessarily need to know that the community supports them.
That said, going back and reading my second response, I feel I may have continued to be more harsh than was warranted. For this I unreservedly apologise. I hope that the OP does have some success with rolling back the surcharges by demonstrating the lack of knowledge of those dealing with VAT in their absence.
PS Fran
Be careful if paying PAYE late. They've changed the rules there as well and there are some sizable penalties knocking about.
http://www.hmrc.gov.uk/payerti/end-of-year/payepenalties/late-payments.htm#2
We have a choice.
I can see the points made but surely, just because someone says "You can call me an idiot" does it mean that you should?
Often the poser is actually pre-empting the possibility that they will be so called and lessening the effects of that attack by saying "Call me an idiot if you will". I don't suppose for a moment that they want to be called such.
To my mind, if people reply to questions on here then that is their choice. If they get offended by what is said back, that is their choice too. If they chose not to ever reply again, well that is their choice as well.
We do not have to get angry or offended; we chose to and some people go looking for reasons to do just that; if they can't find them they will generate them.
People do ask ridiculous questions for a variety of reasons. But we are ridiculous beings; look around you and see what we do if you don't think this is so.
Can you imagine how this post would have turned out if someone had said something like:
"I think you will find it is the 7th day, working or otherwise; here is a website link that explains it all http:\\reallyhelpful.com. I doubt you will be successful at tribunal but there is no harm in trying, good luck with it".
We have a choice in how we deal with life.
On one hand we can chose to make a person sad; on the other to make them happy.
Why would we ever chose to make someone sad?
Good on you Fran
for asking the question. That is what AWeb is about.
I hope that you are sorting out the mess. If the Company is having problems paying the 15% a phone call to HMRC may give you some grace periods and thus allow the Co to avoid a further surcharge.
All of us at sometime have had a problem and asking a mate for help is the way forward. In this case your mates were on AWeb.
Paying VAT
Those of us who are using Sage V2013 or Sage V2014 are finding the VAT process a real doddle. The submission is simple - direct into HMRC, no re-keying, and using Sage e-banking makes the payment happen immediately, with a payment date of our choice. The nominals are updated automatically and it all takes a couple of minutes. Magic!
I might add that having a baby does make the brain dead.
Pub Quiz
Local pub quiz last night ... a question was "When did vat go from 17.5% to 20%. I put 2009 as my answer, it was in fact 2011. My immediate reaction was "I hope fran001 doesn'y find out" :)
why wait so loong
7th day after endof month after end of quarter gives 5 weeks to pay.
Why on earth is more time needed?
All the best
I'm sure we all know what that's like from time to time. ...too much work and not enough time...
Hope everything gets sorted out one way or the other. Another job you don't have time for I'm sure, but a bit of training up of someone else on the basics of accounting and VAT would probably be wise. I strongly suspect that having to sort out the work of non-accountants in your absence has left you open to unfortunate errors from being overstretched. Having someone that knows how to keep things in relatively sensible order if you have to take time off in the future would be of great help.
Daily tasks Daily, Weekly tasks Weekly
Just post your bank every morning, makes sure sales are invoiced every night and enter purchase invoices the day that you receive them.
Direct debit
I think if you let them DD it out it comes out about 10 days after month end....if you really really really need to monitor cash flow that closely
Me I just pay it 3 days after the quarter end not 33 days...theres no bank interest anymore so whats the point
http://www.hmrc.gov.uk/tools/vatpaymentsdeadline/calculator.htm
Try this. It's a new calculator by HMRC which gives you the exact date when the payment is due.