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Are you struggling to make your VAT payment?

2014
01
APR

If you are struggling to pay your VAT bill don't bury your head in the sand and do nothing.  These suggestions will help:

1. Submit your VAT return figures online – if you don’t HMRC may over-estimate what is due
2. Cancel your direct debit if you have one set up
3. Pay some of the amount due if you can
4. Pay the full amount or the balance as soon as you can

............. but will you receive a penalty for not paying?

If your turnover is less than £150,000 and this is the first occasion you have not been able to pay your VAT bill you will receive a letter offering help and support. If you fail to pay or fail to submit a VAT return within the next 12 months you will receive a Surcharge Liability Notice. If you default again in the 12 month period you will have to pay a surcharge of 2% of the amount unpaid if it is more than £400. A further default will have a 5% surcharge on unpaid VAT.

If your turnover is more than £150,000 you will not receive the letter offering help and support but will receive the Surcharge Liability Notice. You will then be subject to the same surcharges as described above.

So is you really can’t pay you will not receive a penalty if this is your first default or you haven’t defaulted for a period of 12 months.

If you are on the standard accounting scheme for VAT and regularly find it difficult to make your VAT payments you may want to consider changing to the VAT cash accounting scheme. If your turnover is below £150,000 the flat rate scheme may suit you better.

Businesses already using the cash accounting scheme or being paid at point of sale should not have difficulty paying their VAT bill as they will have already received the VAT charged.

TIP:     Transfer small amounts regularly into a savings account – don’t forget the VAT element of each payment you receive is not yours to spend!

Related Tags:  Bookkeeping |  Business Tips |  VAT | 
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Old Sarum, Salisbury
Salisbury
Wiltshire
SP4 6QX

e: info@sandrasilk.co.uk
t: 01722 341820