Some of the key facts and figures about VAT and related systems such as Intrastat and EC Sales Lists are listed below.
Only a summary is given and you should always seek detailed professional advice on your specific circumstances.
VAT Registration and Deregistration Thresholds
|
VAT Registration |
£85,000 |
|
Distance Selling |
£70,000 |
|
Relevant Acquisitions |
£85,000 |
|
VAT Deregistration |
£83,000 |
VAT Rates
|
Standard Rate |
20% |
|
Reduced Rate |
5% |
|
Super Reduced Rate |
0% |
|
Farmers Flat Rate Addition |
4% |
VAT Return Filing Periods
|
Small Businesses (Turnover < £1,350,000) |
Annual (optional) |
|
Businesses in a net repayment position |
Monthly (optional) |
|
Large Businesses (Annual VAT Liability > £2,300,000) |
Monthly (optional treatment in lieu of quarterly returns + monthly payments on account) |
|
All other businesses |
Quarterly (businesses can choose which quarters to use) |
Pre-Registration Input Tax – Time Limits
|
Goods still on hand at time of registration |
VAT is recoverable if incurred in the 4 years prior to VAT registration. |
|
Services (unless relating to goods consumed pre-registration) |
VAT is recoverable if the service was received in the 6 months prior to registration and for the purpose of the business now covered by the VAT registration. |
VAT Return Filing and Payment Deadlines
|
Paper returns (available in very limited circumstances) and users of the Payments on Account Scheme. |
30 days from period end |
|
Electronic returns (excluding users of the Payments on Account Scheme) |
37 days from period end |
Filing Periods and Deadlines – other returns
1. EC Sales Lists (Goods) – Filing Periods:
|
Dispatches < £35,000 per quarter |
Calendar quarters |
|
All others |
Monthly |
2. EC Sales Lists (Services) – Filing Periods:
|
Normal |
Calendar quarters |
|
Optional |
Monthly |
3. EC Sales Lists – Filing Deadlines:
|
Paper returns |
14 days from period end |
|
Electronic returns |
21 days from period end |
4. Foreign Business VAT Refunds – Filing Periods:
|
EU |
Max = 1 calendar year Min = 3 months |
|
Non EU |
Max = 12 months (1 July to 30 June) Min = 3 months |
5. Foreign Business VAT Refunds – Filing Deadlines:
|
EU |
30 September |
|
Non EU |
31 December |
Penalties
1. Failing to register on time
|
Careless |
10% – 30% of net VAT due |
|
Deliberate |
20% – 70% of net VAT due |
|
Deliberate and concealed |
30% – 100% of net VAT due |
2. Failing to file and pay VAT on time
|
1st Default |
0% |
|
2nd Default |
2% of unpaid amount |
|
3rd Default |
5% of unpaid amount |
|
4th Default |
10% of unpaid amount |
|
5th Default |
15% of unpaid amount |
Note: The first default triggers a 12 month default surcharge period and a surcharge of 0%. The second and subsequent defaults extend the default surcharge period by 3 months and the surcharge increases to 2%, 5% and so on.
3. Errors on VAT Returns
|
Careless |
0% – 30% of value of error |
|
Deliberate |
20% – 70% of value of error |
|
Deliberate and concealed |
30% – 100% of value of error |
Capital Goods Scheme Items
|
Item |
Value |
Adjustment Period |
|
Computers, single items of computer hardware, ships or aircraft |
£50,000 or more excluding VAT |
5 years |
|
Land and buildings (including civil engineering works, refurbishments and fit outs) |
£250,000 or more excluding VAT |
10 years – (5 years where the interest acquired has less than 10 years to run). |
VAT Error Disclosure Thresholds
|
Net Value of Error |
Method of Disclosure |
|
< £10,000 |
VAT Return (see note below) |
|
< £50,000 AND < 1% of Box 6 Value All other amounts |
VAT Return (see note below)
VAT 652 form |
Note: To achieve the maximum opportunity of minimising penalties taxpayers can include the net value of errors discovered on the current VAT return and may notify this action to HM Revenue & Customs using a VAT 652 form.
Intrastat
1. Thresholds:
|
Dispatches Exemption Threshold |
£250,000 |
|
Acquisitions Exemption Threshold |
£1,500,000 |
|
Delivery Terms Exemption Threshold |
£24,000,000 |
2. Filing Periods:
|
Dispatches |
Monthly |
|
Acquisitions |
Monthly |
3. Deadlines:
|
Dispatches |
21 Days |
|
Acquisitions |
21 Days |
Special Schemes
1. Cash Accounting
|
Joining Threshold |
Turnover < £1,350,000 less than or equal to |
|
Leaving Threshold |
Turnover ‹ or › £1,600,000 turnover exceeds £1,600,000 |
2. Annual Accounting
|
Joining Threshold |
Turnover < £1,350,000 less than or equal to |
|
Leaving Threshold |
Turnover ‹ or › £1,600,000 turnover is more than £1,600,000 |
3. Flat Rate Scheme for Small Businesses
|
Joining Threshold |
Taxable Turnover (Exc VAT) < £150,000 less than or equal to |
|
Leaving Threshold |
Total Business Income (Inc VAT) > £230,000 |
|
4. Payment on Account Scheme |
Annual VAT Liability > £2,300,000 |
Specific advice should be obtained before taking action, or refraining from taking action, in relation to the above.
