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How HMRC Targets Traders Who Are Not Registered For VAT?

The HMRC has warned traders who ignore or miss the VAT registration requirement that they may receive financial penalties based on a percentage of the VAT owed to HMRC. This can go up to 100%, depending on the severity of not registering on time. Resellers are required to register for VAT when their historical turnover exceeds £ 85,000 in the last 12 months and must notify HMRC within 30 days of the end of the month in which the VAT limit has been exceeded. The company is then liable for VAT from the first day of the second month.

HMRC Targets Traders Who Are Not Registered For VAT

If a company, e.g. exceeded the £ 85,000 VAT limit in December, he must notify HMRC by January 30 and be registered for VAT on February 1. A registration requirement can also arise when a business expects the sale to exceed £ 85,000 on its own within the next 30 days. It is important to note that HMRC distributed these reminders directly to businesses rather than their tax agents or auditors. Therefore, business owners are encouraged to share this communication with their accountant as soon as possible, which gives them ample opportunity to reduce financial penalties once a company's VAT registration deadline expires.

What are the Rules?

A business must be subject to VAT if its historical taxable turnover exceeds £85,000 in the past 12 months or if it expects its future taxable turnover to exceed £85,000 within the next 30 days. Exempt sales, such as land or insurance, are not taken into account in these thresholds. However, zero-rate sales, such as children's books and clothing, and reduced prices, such as home modifications, count.

For historical testing, the company must notify HMRC within 30 days of the end of the month when it has crossed the threshold and registered as of the first day of the second month. For the future test, he must announce the future forecast for the end of the 30 days after the birth and log in at the beginning of the 30 days.

Penalty On Late Registered for VAT

Penalty On Late Registered for VAT

HMRC can charge a fine when a company does not meet the VAT registration deadline. These fines are based on a percentage of the net VAT payable between the date the company should have registered and the date it was actually registered, ranging from 5% to 15% depending on when the registration is.

Is There an Exemption from the VAT Threshold?

Yes, these include sales such as home rentals or insurance. For example, sales with a total of "value zero". Children's clothing and sale with "discounted rating" as. Both changes of ownership are included in the sales tax limit.

It is important that you don't get annoyed if you receive a notification from HMRC of your business income. If you believe VAT registration is irrelevant to your business, you must notify HMRC to avoid further action. However, if it has been posted for sales tax purposes, you should correct it as soon as possible. If you are not sure whether your company should be registered for VAT or not, we will help you to clarify your position and continuously monitor your VAT obligations.

We can even prepare your VAT returns from your own records or let us manage your books and VAT returns. In any case, we will always do our best to ensure that you claim as much VAT as possible; especially with controversial items such as mixed-use costs and engine operating costs.

For a free initial consultation on your company's VAT status, call our friendly and experienced team today on 02085718826 or start the conversation using our online inquiry form.

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