I owe the VAT man, what should I do?

Affected by Covid-19? Immediate Rescue Or Closure Options Available

FAST Free Director Advice & Support, With 100+ offices Nationwide our Licensed Insolvency Practitioners can Help Today.

I owe the VAT man, what should I do?

Updated: 19th December 2012

It just came to my attention that I owe VAT which I have never had to pay before. This is confusing because I don’t have a very large business and our profits are not very high. Suddenly I get a notice that I owe money and I don’t understand why. Can you explain why I only made about £8,000 more than I did last year and this year they say I need to pay?

My company is a small print shop that serves a fairly localised clientele in Brighton. We print menus, adverts, business cards, brochures and other products of this kind. There are only myself, as the director/owner, my wife and two clerks working at the shop. This year I brought in £94,732 and last year it was just under £84,000. This isn’t a great deal of money but the amount I will need to pay in VAT seems huge. Please tell me, since I owe the VAT man, what should I do?


One of the aspects of paying Value Added Tax (VAT) which is always rather confusing to small business owners and directors is that there is a threshold which must be met before they need to register for VAT. If you keep in mind the ‘magic number’ £85,000, you should not have any problems. It is when you have sold taxable goods and services that total more than that amount within a twelve month timeframe that you will be responsible for registering.

There are several reasons why you may have been notified that you owe VAT. Some business owners don’t expect (or know about!) that threshold so they don’t register. Then when filming in their annual accounts, HMRC sees that sales went beyond that mark. This will immediately be flagged for investigation. Other times, a company has registered but didn’t make the money they expected and didn’t deregister if their taxable sales fell below £83,000.

The bottom line is that if you have received notice from HMRC that you are delinquent in VAT or that you have failed to register, it is imperative that you act immediately. Indeed there are times when the VAT man makes a mistake and you really do not owe the amount requested, if anything at all! We can help you sort it out before HMRC issues a distraint notice or petitions for winding up your business. If you owe the VAT man money, don’t put it on the back burner. Call us today so that a qualified insolvency specialist can offer the help and advice you need to avoid penalties and offer a solution to your immediate problems.

For further advice on dealing with VAT concerns and being unable to meet your VAT payment deadlines, read our in-depth article here.

Keith Tully


0800 644 6080
Director Support - Business suffering from Cash-Flow Problems?
If your company is financially distressed, we also offer the below services:
Business debt recovery

  • Recover Unpaid Invoices of £5k+
  • Expert Credit Control Services
  • Stop Late Payers & Bad Debts
Visit Site
Time to pay experts

  • Get Breathing Space with HMRC
  • Support with Business Tax Arrears
  • 35 Years HMRC Negotiation
Visit Site
UK Business Finance

  • Rejected for a CBILS Loan?
  • Get Emergency Business Funding
  • Supporting 1000+ UK Companies
Visit Site
Who we help
  • Company Directors
  • Finance Directors
  • Sole Traders
  • Accountants
  • Small Businesses
  • Large Businesses
  • Partnerships
Contact our team
Jonathan Munnery
Gillian Sayburn
Julie Palmer
or Find your Nearest Office

Here at Real Business Rescue we take your privacy seriously and will only use your personal information to contact you with regards to your enquiry. We will not use your information for marketing purposes. See PRIVACY POLICY

Business Rescue Advice for Directors
Free Guide for Limited Company Directors
Business Rescue Advice for Directors
  • How to manage company cash flow problems
  • Advice on dealing with HMRC
  • Understanding rescue and closure options
  • And much more...
Free Guide Download
Dealing with your Insolvent Clients
Business Rescue Guide for Accountants
Dealing with your Insolvent Clients
  • Helping you advise insolvent clients
  • Spotting signs of client distress
  • Exploring business rescue options
  • And much more...
Free Guide Download
Our numbers speak for themselves
Number of UK Offices
Directors Helped
Licensed Insolvency Practitioners