Businesses have to register for VAT if their taxable turnover in the previous 12 months reaches the VAT registration limit (£73,000 from 1/4/11) or if they believe their turnover in the next thirty days will exceed the VAT registration limit.
A recent HMRC campaign offered businesses that have not yet registered for VAT (and should have done so) the chance to come forward and make a disclosure under favourable terms.
Businesses had to notify HMRC by 30 September 2011 of their intention to make a voluntary VAT disclosure. Under the terms of the VAT initiative, businesses who have notified their intention to take part in the campaign must register for VAT by 31 December 2011. They will then receive their VAT registration number and instructions on how to complete their first VAT return. Once this has been submitted most businesses will face a lower penalty rate of 10% on late paid VAT.
HMRC''s Head of Campaigns commented in the news release that:
'We are determined to ensure everyone pays their fair share and, since September, have begun identifying people and companies who we believe are trading above the VAT threshold but have not come forward. We will be targeting these groups early in the New Year. I urge anyone with unpaid tax to use it to come forward and avoid potentially lengthy and costly investigations. The penalty they will pay will still be lower than when HMRC catches up with them.'
HMRC also previously announced that any taxpayer targeted by a previous campaign will not be able to use a subsequent campaign to disclose liabilities.
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