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VAT Key Data

Some of the key facts and figures about VAT and related systems are listed below.

Updated 14 May 2021

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
VAT Deregistration£83,000

VAT Rates

Standard Rate20%
Reduced Rate5%
Super Reduced Rate0%
Farmers Flat Rate Addition4%

VAT Return Filing Periods

Small Businesses (Turnover < £1,350,000)Annual (optional)
Businesses in a net repayment positionMonthly (optional)
Large Businesses (Annual VAT Liability > £2,300,000)Monthly (optional treatment in lieu of quarterly returns + monthly payments on account)
All other businessesQuarterly (businesses can choose which quarters to use)

Pre-Registration Input Tax – Time Limits

Goods still on hand at time of registrationVAT 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

Foreign Business VAT Refunds – Filing Periods and Deadlines:

Filing PeriodMax = 12 months (1 July to 30 June) Min = 3 months
Filing Deadline31 December

Penalties

1. Failing to register on time

Careless10% – 30% of net VAT due
Deliberate20% – 70% of net VAT due
Deliberate and concealed30% – 100% of net VAT due

2. Failing to file and pay VAT on time

1st Default0%
2nd Default2% of unpaid amount
3rd Default5% of unpaid amount
4th Default10% of unpaid amount
5th Default15% 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

Careless0% – 30% of value of error
Deliberate20% – 70% of value of error
Deliberate and concealed30% – 100% of value of error

Capital Goods Scheme Items

ItemValueAdjustment Period
Computers, single items of computer hardware, ships or aircraft£50,000 or more excluding VAT5 years
Land and buildings (including civil engineering works, refurbishments and fit outs)£250,000 or more excluding VAT10 years – (5 years where the interest acquired has less than 10 years to run).

VAT Error Disclosure Thresholds

Net Value of ErrorMethod of Disclosure
< £10,000VAT Return (see note below)
< £50,000 AND < 1% of Box 6 Value All other amountsVAT 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.

Special Schemes

1. Cash Accounting

Joining ThresholdTurnover < £1,350,000    less than or equal to
Leaving ThresholdTurnover ‹ or › £1,600,000  turnover exceeds £1,600,000

2. Annual Accounting

Joining ThresholdTurnover < £1,350,000  less than or equal to
Leaving ThresholdTurnover ‹ or › £1,600,000  turnover is more than £1,600,000

3. Flat Rate Scheme for Small Businesses

Joining ThresholdTaxable Turnover (Exc VAT) < £150,000  less than or equal to
Leaving ThresholdTotal Business Income (Inc VAT) > £230,000
4. Payment on Account SchemeAnnual VAT Liability > £2,300,000

Special rules affecting businesses in Northern Ireland

VAT Registration and Deregistration Thresholds

Distance Selling£70,000
Relevant Acquisitions£85,000

EC Sales Lists (Goods) – Filing Periods:

Dispatches < £35,000 per quarterCalendar quarters
All othersMonthly

EC Sales Lists (Services) – Filing Periods:

NormalCalendar quarters
Optional                                       Monthly

EC Sales Lists – Filing Deadlines:

Paper returns                                            14 days from period end
Electronic returns21 days from period end

Intrastat

Thresholds:

Dispatches Exemption Threshold£250,000
Acquisitions Exemption Threshold£1,500,000
Delivery Terms Exemption Threshold£24,000,000

Filing Periods:

DispatchesMonthly
AcquisitionsMonthly

Deadlines:

Dispatches21 Days
Acquisitions21 Days

Specific advice should be obtained before taking action, or refraining from taking action, in relation to the above.

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