Online VAT filing to become mandatory

MORE VAT transactions will be moved online under proposals from HM Revenue & Customs.

In a consultation released yesterday, HMRC plans to make it compulsory for all VAT registered businesses with a turnover below £100,000 to file VAT returns online from 1 April 2012. The taxman has also said that online will become the “default channel” for businesses to register and deregister for VAT, and change details.

The consultations, which close on 31 October, also ask for views on the proposed “Registration Wizard”, which will become the default channel for new businesses registering for direct taxes, as well as VAT.

PKF accountants have warned that this must not lead to costs being taken away from HMRC and imposed on small businesses.

Patrick Harrison, tax partner with PKF, said: “Although doing all your tax paperwork online looks set to become the default option, it should never become the only option. Pushing all tax communication online may save money for HMRC but making it mandatory would spark opposition from those who worry about data security – hardly a strong point for the tax authorities in recent years.”

There must be a “give and take” approach, he added, including payment holidays when businesses start out.


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