Annual accounting: a new way to pay VAT

Article Abstract:

The value added tax (VAT) annual accounting scheme is designed to reduce paperwork but it does have some disadvantages and not all companies are eligible. The scheme will reduce the number of required filings to one a year and VAT will be paid directly in nine equal monthly instalments. Before individuals can use the scheme: they must have registered for VAT at least one year before they apply for authorization; and they must believe that their taxable supplies for the next year will not exceed 250,000 pounds sterling. If companies lose their authorization they are required to make their final payment within two months and they are not eligible for the scheme for another three years. Users may find some disadvantages including: they do not have any provisions for an appeal to Customs' decisions; they lose some of their control over payments; and they may find it hard to pay direct debits if their turnover drops.

Accounting and auditing, Corporations, Corporations, British

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Sweet reason and the VAT inspector

Article Abstract:

Firms which use 'reasonable excuse' as a defense against penalties for late registration for the UK Value Added Tax (VAT) may find that the outcomes of their cases may depend on circumstances. The center of what constitutes a 'reasonable excuse' is whether a traders' conduct was reasonable, not whether it was right or wrong. The Finance Act of 1985 offers guidance on what can be acceptable as a 'reasonable excuse'. The defense of 'reasonable excuse' cannot be used when a firm does not have enough funds to pay VAT, or when it has relied upon someone who has provided inaccurate data. Excuses put forward in decided cases that have been found by the tribunal to be reasonable excuses include: ignorance of the law; traders mistakenly think they are registered; and Form VAT 1 was not received by the tax payer.

Tax accounting

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Late returns: excuses, excuses

Article Abstract:

Reasonable excuses that can be used as a defense before the Customs and Excise Board for the late registration for the value added tax (VAT) include delays in compilation due to computer failure; non-receipt of VAT return; and late receipt by traders of the VAT 100 return form. Traders who will be late should contact Customs and supply them with all relevant information to support a case for reasonable excuse. Customs officers are likely to be kinder in ruling on matters when all the information is available to them. Traders' levels of experience, ability, and past conduct are all considered by Customs as evidence on whether conduct is reasonable.

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