Press Room.
Important Changes to VAT Payments Could Result In Further Costs
Business
HM Revenue & Customs (HMRC) has recently
introduced an administrative change that will require all VAT
cheque payments to have cleared HMRC's bank account by the due date
shown on the VAT return. Late payment could lead to a penalty fine
warns leading business and financial advisers Grant Thornton
LLP.
From 1 April 2010, late payments will be
subject to a surcharge of between 2% and 15% of the tax due as the
deadline will no longer simply apply to when the cheques are
received by HMRC, as is currently the case. The level of the
penalty imposed by HMRC will depend on the taxpayer's recent VAT
payment history and will be increased whenever a due date is
missed.
Loraine Parkin, Head of VAT at Grant Thornton
says; "This change to the VAT payment system is yet another hurdle
that HMRC is forcing businesses to jump over. Imposing such steep
penalties for late payment is a harsh stance and one that
businesses could do without in the current economic climate.
"We recommend that businesses opt to make VAT
payments electronically as it is safe and secure and in most cases
will provide up to seven extra calendar days to pay. Alternatively,
taxpayers can pay by direct debit and this would extend the normal
payment deadline by ten calendar days.
"We are advising businesses with any queries
to take advice and appropriate action as soon as possible before
the 1 April change comes into force."
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ENDS-
For further queries, please contact Nicola
Daley, 0207 728 2244 or via email on nicola.daley@gtuk.com