Small firms face VAT crackdown

02/February/2012

Firms with taxable turnover over £73,000 will be fined by the taxman if they do not sign up for VAT, an accountant has claimed.

Colin Corder, VAT manager at Mitchell Charlesworth, said non-VAT registered businesses could be investigated by HM Revenue & Customs following the close of an amnesty period for registration on December 31st.

Mr Corder claimed the taxman is to investigate 40,000 non-VAT registered businesses which it believes should now be VAT registered, or should have been in the past.

"Firms that have not registered but are found liable for VAT could face penalties of up to 100 per cent of the tax owed on top of the existing sum owed and possible criminal prosecution," he said.

Firms are particularly at risk if they are not taking regular accountancy advice, Mr Corder added.

Companies that take accountancy advice infrequently are especially vulnerable to the clampdown, he stated.

"I often see businesses that do not know how and when to check if they have exceeded the VAT threshold. As a result many businesses exceed the VAT threshold but are unaware they have. So the key message is to check and double check your VAT position with your accountant through-out the year."

If you are unsure exactly what your requirements are, see how Jordans' UK tax services could help.