Chartered Accountants and Professional Business Advisers

VAT Key Data

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.