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VAT Help and Advice: How to avoid late payment penalties

Licensed UK Insolvency Practitioners FREE Meeting for Company Directors

We can help with serious company debts, HMRC and creditor pressure, VAT/PAYE/Tax arrears, cash flow problems and raising finance.

Updated: 29th January 2020

What are the penalties of paying VAT late?

If your business is having trouble paying VAT on time or in full, you (as an owner or director) could be subject to severe VAT penalties. Keep in mind that if you are having difficulty paying taxes, then you most certainly have a cash flow problem which means that your company is quite likely insolvent. To continue trading insolvent may mean that you will be held personally liable for any debts the company accrues. Let us help you avoid being subject to VAT late filing penalties or worse yet, being accused of wrongful trading.

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I understand that the last people you would ever want to speak to would be a business rescue firm, but I also know that trying to understand your options can be equally challenging. I have seen every eventuality in business and can help clarify what your options are.

Many people believe that HMRC VAT penalties are only given on late filing. This isn’t exactly true, although that is the most common type of penalty. There are times when an incorrect amount is paid or a sheer case of fraud is determined. In those instances, there will also be penalties/surcharges imposed on the offending business whether or not they filed on time. In fact, there is even a penalty for not deregistering for VAT if your business no longer meets the criteria for paying this tax. One thing to keep in mind is that it is imperative to be totally aboveboard when filing because VAT fraud penalties can be harsh, including criminal charges against directors!

Avoiding VAT Penalty Charges

With a little bit of good old fashioned common sense, ethical business practices and some help from insolvency specialists, it is possible to avoid VAT Penalty charges. If you find that you cannot pay your taxes on time, don’t wait until you are served with a default notice! And by all means, don’t try to falsify your records to make the amount you owe appear to be less than it is! Some companies have done this trying to ‘buy time,’ but this is not the way to find time to pay! We can help you make arrangements with HMRC to perhaps gain you six to twelve months to pay your VAT and HMRC are willing to work with you and with us. By taking advantage of the Time to Pay scheme, you can pay your arrears over time without accruing VAT penalties in many cases.

What to Do If You Have Already Received VAT Penalties

Unfortunately, you may have already received VAT penalties and you feel they are incorrect.  If this is the case, we know how to successfully appeal a VAT penalty. Real Business Rescue will determine if indeed HMRC has made an error and we can either advice you on how to proceed or handle the appeal on your behalf. If they have made an error, it can be corrected. On the other hand, if the penalty is accurate, we can help arrange payment plans so that you can continue operating whilst catching up on late VAT and the penalties which have been added to your bill.

In most cases, cash flow is the real problem which is why it pays to call in the experts. HMRC will work with you as long as you are not involved in wrongful trading or trying to defraud your return. Let our team help you find a solution so that your company can turn around, catch up on back payments, and once again operate at a profit. No one wants to see you succeed more than we do so let us help you avoid VAT penalties and save your company in the process. This is what we are here to do!