Understanding HMRC liabilities is never easy because all rules and regulations are full of legal jargon. It would seem as though paying Value Added Tax, VAT, would be a straightforward matter. You pay a certain percentage, HMRC is happy and you can go about your business, right? Unfortunately, there are so many variables in the tax laws that an average business owner/director is bound to make costly mistakes. This is serious business and government will not think twice about seeking a distraint order if VAT is left unpaid or extremely delinquent. Whether you are having difficulties paying VAT on time or simply need help understanding how much to pay, it is time to seek expert VAT debt help and advice.
One of the problems you may be encountering is that you didn’t register for VAT timely. There are thresholds which must be met and as a general rule of thumb, sales greater than £79,000 over the previous 12 month period would require registering for VAT. Sometimes it is unclear whether or not your business needs to be registered for VAT so it helps to have an expert go over your books with you. There may be times when you do not have to register and other times when you may wish to do so voluntarily. The thing to keep in mind is that it is imperative that you register if your company meets the threshold as you will be required to pay value added tax.
The VAT laws in regards to rates charged are quite complicated and as a result, many business owners pay the wrong rates or none at all. Some foodstuffs and supplies have been rated at zero, but this does not include catering, for example. Unfortunately, HMRC does not take ‘ignorance of the law’ into account so you are responsible for getting it right. If you thought a specific service or product did not fall under VAT and did not pay, you could be responsible for a huge amount in arrears plus a penalty!
There is a process whereby you can appeal HMRC’s decisions on assessments and/or penalties, but here again it can be a bit confusing. If you have been penalised and would like to appeal enlist the help of a recovery expert. Insolvency practitioners can offer professional VAT debt help and advice when appealing decisions you feel are not right. It may be that you are mistaken and HMRC assessed correctly, in which case you would need to find a way to pay the amount owed.
During these trying financial times, many businesses are operating at a deficit. One way to keep the taxman happy is to find a way to increase cashflow in order to make payments. Sometimes you are not yet late in making payments but will be if you cannot find a way to raise the capital. Real Business Rescue, Cooper Williamson Ltd., can offer solid advice on getting a small business loan, invoice factoring or other ways to increase cashflow. If increasing cashflow is not the best alternative, then we can help you determine if you should apply for HMRC’s Time to Pay Scheme.
Especially in today’s economy when many businesses are insolvent or winding up, Government wants you to continue trading. However, they also want to get paid on any taxes you owe so they will most often work with you to establish a payment plan over a period of time. Not only would you be required to keep current payments in a timely manner but you would also be required to uphold your end of the payment plan. Depending on the amount overdue, your payment scheme should be kept manageable. Do you need one year, two years or perhaps five years to catch up your arrears? Expert analysis and HMRC debt advice would help you set up realistic goals.
Whether you are delinquent on paying VAT or not sure of how much you should be paying, it is of vital importance to seek VAT debt help and advice as quickly as possible. HMRC will not tolerate inaction so it is in your best interest to take immediate steps to correct the problem. You do not want a distraint order being issued and you certainly don’t want to be ordered to liquidate your assets. Our team can help you plan out the best solution to your VAT problems so that you can continue doing business without looking over your shoulder for the taxman.
12th December 2018
Small and medium-sized enterprises (SMEs) across the UK are paying increasingly large sums of money to collect amounts owed to them by their clients and customers.Read More
4th December 2018
The number of independent retailers who closed down outlets during the first half of this year reached a record high level for any comparable period.Read More