Our VAT Update reviews the key areas you should be aware of stay compliant:
VAT Registration and Deregistration Thresholds: From 1 April 2024, VAT registration is required for taxable turnover over £90,000, and deregistration is possible if turnover is below £88,000.
Impact of VAT Registration: HMRC offers a VAT registration estimator tool to help businesses understand the impact on pricing and profitability, accessible via gov.uk.
Changing VAT Registration Details: Changes must be made online through the Government Gateway, with limited exceptions for digitally excluded individuals.
VAT Penalty System: A new penalty system for late VAT returns and payments started in 2023, with penalties based on the lateness of submissions and payments.
Time to Pay Arrangements: TTP can now be arranged online for debts under £100,000, provided certain conditions are met, such as filing all tax returns.
Getting VAT Recovery Right: Ensure valid VAT invoices with detailed descriptions to support input tax recovery, as inadequate details can lead to disallowed claims.
Reclaiming Input Tax Risks: Check supplier VAT charges, ensure business purpose, apportion for mixed-use goods, and note specific rules for motor cars and business entertainment.
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