Hidden threat in VAT amnesty
The amnesty period granted to qualifying companies who have not yet registered for VAT purposes could be a dual-edged sword.
Link: VAT threat to dotcoms
Businesses that trade over the VAT threshold, but have not yet registered with Customs & Excise, have until the 30 September to do so and avoid any penalties.
But by doing so they could open themselves up to a full Inland Revenue investigation because the amnesty offered by Customs is not supported by a similar incentive from the Inland Revenue, according to Moore Stephens.
While welcoming the move, the firm is warning business owners not to be misled by the term ‘amnesty’ and to seek professional advice before registering.
‘Company directors should be aware that registering now means they will be exempt from fines of up to 15% but the scheme still demands they pay tax arrears and make returns and payments on time for the 12 months after registration,’ said Denis Smith, partner at Moore Stephens.
Business owners should not be put off though, as penalties for non-registration can be severe.