Last month Acacia Accounting warned us that the Taxman was planning a campaign to encourage businesses to register for VAT. The Taxman is calling this campaign the ‘VAT Initiative’.
To launch the VAT initiative the Taxman is writing to about 40,000 businesses whose turnover has apparently already exceeded the compulsory VAT registration threshold. Those businesses will be invited to register for VAT and pay over all the VAT owed since the date they should have registered, plus a low penalty of only 10% of the VAT outstanding. Those businesses that first exceeded the VAT threshold within the last 12 months may get away with a nil penalty, but it will be up to the Taxman to decide what level of penalty applies.
The requirement to register for VAT is based on total turnover in a 12 month rolling period and needs to be reviewed each month to determine if the business needs to register immediately. The compulsory VAT registration thresholds of turnover in the past 12 months is…
From 1 April 2011: £73,000
1 April 2010 – 31 March 2011: £70,000
1 May 2009 – 31 March 2010: £68,000
1 April 2008 – 30 April 2009: £67,000
1 April 2007 – 31 March 2008: £64,000
1 April 2006 – 31 March 2007: £61,000
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