All businesses with an annual turnover of £100,000 will be required to file their VAT returns online as of 1st April 2010. They will also be required to make electronic payments in respect of any VAT due.
Businesses with an annual turnover of £100,000 as at 31st December last year should have received a letter from HMRC last month which would have explained that VAT returns would be online as of next month. The enclosed guide detailed the steps that all affected businesses would have to take to prepare for the changeover.
Although this change is currently only affecting companies with an annual turnover exceeding £100,000 it is expected that this will be rolled out to all VAT registered companies by 2012.
As for the companies who will be liable for VAT online services from April, there are some steps which they will need to take in preparation. First of all, the company will need to be registered for the VAT online service. You should receive an activation PIN by post within 7 days. To ensure you do not miss any deadlines you can also sign up to the free email reminder service. You should also speak to your accountant if he is the person usually responsible for filing your VAT return. It is also necessary to check your personal business processes to examine whether or not there is anything you need to adapt in light of these changes. You can also set up your preferred payment method when you register online, however, if you pay by cheque you will be required to order the HMRC Bank Giro slips for paying the cheques into participating banks.