Business Beaver (From Wiltshire Business Online)

Business Beaver

1:06pm Monday 1st June 2009

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Beware – time is running out in HMRC’s online services revolution.

March 2006 saw the publication of the Carter Review of HMRC online services. The report, based on extensive consultation with various stakeholders, concluded that well designed online services can bring real benefits to both taxpayers and the Government.

While the path to “well designed” systems has, at times, been rocky, unquestionably final implementation of key elements of the plan is now bearing down on us and businesses need to be aware of them.

Recently published draft regulations, http://www.hmrc.gov.uk/drafts/draft-ct-online.pdf, require online filing for both Corporation tax and VAT in phases over the next two years.

The Regulations are open for comment until 31 July 2009.

The draft regulations propose that all VAT registered businesses with turnover in excess of £100,000 and businesses registering for VAT from April 1, 2010 will be required to file returns and make payments online from April 2010.

VAT registered businesses with turnover of less than £100,000 will not be included in this first mandatory phase of VAT online but this is being kept under review and the indications are that all VAT registered businesses will be required to comply with the online regulations by 2012.

In addition Corporation Tax, returns and payment will be required to be made online for all companies for returns delivered on 1 April 2011 or later, relating to periods ending on 1 April 2010 or later.

HMRC is stipulating that submissions have to be XBRL compliant. Sorry, I know this is where eyes start to glaze over, but please bear with me. XBRL is an open reporting standard.

In practice business owners will have three choices. Purchase additional software to convert existing data formats to XBRL, rekey the data on the Government Gateway web portal or ask their agent to handle the submissions for them.

The right solution for most business will be a mix of these options. Some may choose to file VAT returns and transmit VAT and Corporation Tax payments themselves and ask their agent to handle the filing of the Corporation Tax return, others will ask their agent to deal with everything.

Having a strategy now to deal with these issues is essential.

Know how your business is going to handle it and the key implementation dates so that when online filings switch from being optional to mandatory you avoid the inevitable penalties that non compliance will bring!

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