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Take Care with VAT
Newsletter issue - January 2011.
The VATman expects all businesses to take reasonable care when completing their quarterly VAT returns. If you make a mistake, which results in the VAT being underpaid, the VATman is likely to charge you a penalty. Penalties can also be applied where a mistake results in you claiming a higher VAT refund than is due.
If the VATman believes your careless behaviour led to the error, he will impose a penalty of between 15% and 30% of the underpaid (or over-claimed) VAT. If you can show that you took reasonable care when completing your VAT return, but still made a mistake, you should get away with a zero penalty.
Reasonable care can be demonstrated by taking any of the following actions, when faced with a VAT problem:
- Contact your supplier to query the VAT charged on their invoice.
- Read the VAT notice or VAT Information Sheet that relates to the issue, (if there is one).
- Speak to a VAT officer and make a note of the advice given.
- Seek advice from a competent adviser.
We can help you with your VAT problems, but please raise the matter with us as soon it occurs. Sometimes it can take a while to get to the bottom of a VAT issue, so its best not to leave the problem on the shelf until the day before the VAT return has to be filed!
Chartered Accountants in Richmond, Surrey, The Hughes Consultancy provides a wide range of business, tax, financial planning and business growth services. All of our clients benefit from competitive pricing, our expertise, and unlimited support. Contact us today to learn how we can support you.