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Electronic VAT filing to become compulsory

Government officials have informed accountants that VAT returns will have to be filed online for all businesses as from the first of April 2012.

Although there has not yet been a formal announcement to that effect, businesses that are under the VAT registration threshold will also have to comply with electronic filing as from that date. Online filing is already a mandatory requirement for companies with an annual turnover of £100,000 or more.

The Chartered Institute of Taxation have already said they believe the current 'conscientious objection to using a computer' exception should apply but they would also like to see another added so that people with disabilities, who cannot use a computer, are exempted from the rule.

The CIOT has already anticipated the change and informed small businesses and limited company contractors about the process. In particular, they have been offering advice to firms who do not use an accountant. As part of this process they have been asking taxpayers if they have encountered any problems whilst using the electronic system.

One of things they want to know is whether businesses have had to hire somebody specially to help them cope with online filing. By surveying taxpayers in this way, the CIOT hopes to share the results with the Revenue and improve the system for everybody. Anybody who like to leave feedback on this issue can do so by emailing the CIOT's Technical Team at technical@tax.org.uk putting 'VAT Mandation extension' as the email subject.

Currently, any larger business owner or freelancer who does not comply with the online filing regulations are subject to a penalty and this rule will be extended to cover all taxpayers by 2012.

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