HMRC Changes re Late VAT Returns

 

HMRC Changes re Late VAT Returns

If a VAT Return is submitted later than the deadline date, the

process used to be that HMRC would raise an estimated assessment for tax which they believed to be due and inevitably this was more than the actual Return would show.

Advice has been to get the Return in as soon as possible and pay the tax accordingly. At the point of receipt, HMRC would update the record to cancel the assessment. This process has now changed.

In future, HMRC will only remove the assessment after the correct Return has been received, verified and if appropriate ant enquiries cleared. At that point the correct return will be included in the VAT Account.

This can be a much lengthier process because as we know, HMRC enquiries can take weeks or months for them to deal with and in the meantime HMRC could now send Collectors to your door looking for payment of the assessment.

Telling HMRC that the Return has been submitted may not be sufficient if there are ongoing enquiries.

Finally, if a taxpayer believes that an assessment is lower than the return & chooses to pay that lower figure then they may encounter a different problem. Within the VAT Regulations there is a provision which states that if a taxpayer knows that an assessment made is lower than the actual VAT due, they have 30 days to inform HMRC. Failure to do so can lead to a penalty of up to 30% of the actual tax due as per the Return.