Background to the incentive scheme
Value Added Tax (VAT) is a tax on
sales of goods and services. It is not a tax on profits. Businesses must register for VAT if they exceed the registration threshold. Registration for VAT is compulsory for most businesses that have a
taxable turnover amounting to more than ¥56,000 a year in any 12-month period. (Valid as at 10/4/03) Currently Customs and Excise issue a Belated Notification Penalty (BNP) to businesses that are identified
as liable for VAT registration, or who apply to be registered outside the statutory time limits. This penalty is charged as a percentage of the tax arrears. What is the Incentive Scheme?
Under the Scheme any business that voluntarily applies to register for VAT between 10th April and 30th September 2003, and provides Customs and Excise with information to enable them to identify
when the business should have been registered will not have to pay a penalty.
Why are Customs and Excise introducing this Scheme? In addition to supporting and assisting businesses in
achieving compliance, the Scheme aims to reduce the cost of achieving compliance, and reduce the potential for businesses to gain an unfair competitive advantage through non-compliance.
What about any tax arrears? Customs and Excise are aware that many businesses applying to register will have significant arrears of tax, and they will expect any arrears to be paid in full. However,
Customs and Excise is willing to discuss arrangements for the settlement of any VAT due.
What do I have to do to get on the Scheme? Simply contact the Customs & Excise National Advice
Service on 0845 010 9000 or see the HMCE website our VAT registration information. Next steps
·1 You must register with Customs and Excise if the value of your goods or services exceeds £56,000 in any 12-month period. You must also register if you expect to exceed the VAT registration threshold in the next 30 days alone so you can immediately charge VAT on your invoices. Get Form VAT 1 from Customs and Excise: 0845 010 9000;
www.hmce.gov.uk/forms ·2 If you expect to charge
less than £56,000 each year for your products or services but are considering voluntary registration, get further information from Customs and Excise on 0845 010 9000 - or seek advice from your
accountant ·3 See Keeping VAT records
¥?4 For more information read: Should I Be Registered For VAT? (Notice 700/1). Contact Customs and Excise National Advice Service: 0845 010 9000; www.hmce.gov.uk/forms |
