VAT online filing to be compulsory from 2012

Posted by John Stokdyk PM | on Mon, 16/08/2010 - 09:58 4273 4 comments

Government ministers have advised professional representatives that they will make online filing of VAT returns compulsory for all businesses from 2012.

The move follows the introduction of mandatory online filing for newly registered businesses and those turning over more than £100,000 from 1 April 2010. According to the CIOT, the transition worked smoothly during the period up to 31 July with generally positive feedback from institute members, but some residual concerns about small business.

In the run-up to the March 2010 Budget there were some signals from HMRC that it might bring forward the date for universal filing, but if the government goes ahead with what is expected to be an April 2012 start date, it will match the programme originally laid down by Lord Carter in his 2006 review of HMRC online services.

People who have a conscientious objection to using a computer will be able to continue filing paper returns and the CIOT has argued that some people with disabilities that prevent them using computers should also be exempted from the rule.

Unfair to small businesses

The Practitioner | Mon, 16/08/2010 - 13:28 | Permalink

I had a bit of a whine about this last night. I have clients out in the sticks who simply can't get reliable Internet access. What provision is there for them to file their VAT returns?

I see the CIOT refers to filing VAT return info over the phone - is this an option?

I appreciate that "most" businesses are online these days, but for VAT registered traders who are not currently online or indeed computerised in any way this is a real imposition by Government, and I think they ought to give some financial incentive to facilitate what is clearly a big money saver for HMRC in the long run. They did it with PAYE, let's have some financial incentive to help online VAT filing too.

We now have a number of clients for whom we file VAT returns online, just punching in their figures for them. We obviously have to charge for the service, but I wonder that more of them haven't raised objections with HMRC. I certainly would if I had been caught by these new requirements and was being forced to pay additional accountancy fees just to meet a new Government regulation.

Added cost to the small business

SXGuy | Wed, 18/08/2010 - 14:42 | Permalink

Quite a number of clients, prefer to work out their VAT themselves. They do not wish to have the cost of paying us to do it for them, whats more, a handfull of them, are "old school" who have no interest, or infact skill in using a computer, let alone having internet access.

Although i welcome the oppotunity to be able to earn more money from those who wish to pass their figures to us to file on their behalf, i do worry that it will just simply end up being another cost that the small business can not afford.

VAT On line filing

G A Lyon | Wed, 18/08/2010 - 16:00 | Permalink

"People who have a conscientious objection to using a computer"

What arrant nonsense.

This is progress and we should applaud the saving in cost at HMRC and in our own efficiency gains, there is always provision made for valid exceptions so why should taxes be wasted providing extra resources for people who choose not to comply because it is inconvenient.

If you are VAT registered you either had to be or you chose to be (for some advantage) so stop whining about a tiny additional compliance cost.

And by the way where is your added value service?

It takes less than 5 minutes to do the on line return, so are you saying that these clients aren't worth 20 minutes a year of low level staff to keep them happy?

HMRC money saver

gnorwebthgimi | Tue, 21/09/2010 - 12:24 | Permalink

I really don't see a potential money saver for HMRC.

Do you really think that HMRC will save any money when it dogmatically imposes another hoop for tax payers to jump through?

It will cost them: One person to request an online filing authority from

Another person to send the authority

Another person person on technical support

Another person to deal with priority issues when returns can't be set up before the return deadline

Another person to deal with agents authorisation for client returns.

and lots and lots of web development costs for new browsers, security updates etc etc etc etc etc.

All this just so the don't have open an envelope, bank a cheque and type 9 numbers into a system.

We're DOOMED, we're ALL DOOMED.