Online VAT move may affect small businesses

Traditional small businesses could be hardest hit by a move to make online VAT filing mandatory, local accountants are warning.

HM Revenue & Customs (HMRC) is considering proposals to set up an online Registration Wizard as part of its ‘Digital by Default’ strategy to streamline tax administration.

A Government consultation document outlines plans to make the e-system mandatory by April 2012. This process would also include corporation tax, self assessment and PAYE.

Maidstone-based DSH Chartered Accountants and Business Advisors is concerned that traditional firms and sole traders may be affected by the shift away from the paper filing system.

Fiona Ratcliff, VAT and Indirect Tax Manager, said: “The online filing system is quick and easy to use and gives companies extra time to pay their VAT, so businesses should not be overly worried about making the transition to online filing.”

“My only concern is for our small traditional business clients who do not own computers. They will have to invest in new equipment and learn how to operate the new online filing system or pay for our services to do it for them, which we are happy to undertake.”

HMRC’s ‘Digital by Default’ consultation document outlines plans to make tax administration simpler.

Cabinet Office Minister Francis Maude said: “The shift towards online services has the power to transform the relationship between Government and individuals.”

“This does not mean we will abandon groups less likely to access the internet: we recognise that we cannot leave anyone behind. Every single Government service must be available to everyone – no matter if they are online or not.”

The consultation closes on 31 October 2011.

For further information about VAT, dealing with the taxman and how DSH can help businesses, visit or call 01622 690666.

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