Whatever VAT scheme you’re on, HM Revenue & Customs (HMRC) will expect you to meet the deadline for submitting your return and settling your bill.
You’ll usually be expected to submit your return one calendar month and seven days after the end of your accounting period.
What happens when you miss the deadline?
If you miss the deadline for your VAT return, or you don’t make your payment on time, HMRC will record a default. These defaults build up, and from a certain point you’ll start having a surcharge added to your VAT bill.
Regularly failing to file your return on time can start to become an extremely costly error for your business. If you know you won’t make payment on time then call HMRC and forewarn them – if you can agree a later payment date, you may avoid a penalty (but this will be at HMRC’s discretion).
Currently, HMRC lists the percentage surcharges as follows:
|
Defaults within 12 months |
Surcharge if annual turnover is less than £150,000 |
Surcharge if annual turnover is £150,000 or more |
|
2nd |
No surcharge |
2% (no surcharge if this is less than £400) |
|
3rd |
2% (no surcharge if this is less than £400) |
5% (no surcharge if this is less than £400) |
|
4th |
5% (no surcharge if this is less than £400) |
10% or £30 (whichever is more) |
|
5th |
10% or £30 (whichever is more) |
15% or £30 (whichever is more) |
|
6 or more |
15% or £30 (whichever is more) |
15% or £30 (whichever is more)
|
The VAT Help Notice
The first time you default, you get a ‘VAT Help Notice’ that says that your VAT return hasn’t been received, with guidance on how to stop this happening again.
The second time you default, you’ll be warned again, but if you default a third time then you will have a surcharge added to your VAT bill, as per the table above.
If you don’t get your VAT in order, the costs can escalate very quickly into large amounts. So it’s important to deal with any problems as soon as you can, and to get back on track with your VAT deadlines.
If you believe that a return was submitted on time and wasn’t late, you can appeal.
If you’ve been late with your VAT return, or have been hit by a surcharge, we’ll help you get your VAT sorted and will make sure your return is submitted on time, every time.
Give us a call on 01454 300 999, or drop an email to info@fd-works.co.uk
Find out more about the FD Works’ approach to finance at fd-works.co.uk