HMRC proposes to move more VAT filing online

HM Revenue and Customs has launched a consultation on the next steps for moving VAT online.

It proposes that from 1 April 2012, it will be compulsory for VAT registered businesses with a turnover below £100,000 to file VAT returns online and make electronic payment of any VAT due.

There are also plans to make online the default (though not compulsory) channel for all businesses for VAT registration, deregistration and changes to registered details.

Since 2010, larger businesses and all new VAT registrations have had to file VAT returns online and pay their VAT electronically. Others can still file paper returns and pay by cheque.

Although HMRC claims that moving to online filing has so far been 'considerably faster' than predicted, with 'few practical problems', for some older businesses and some in rural locations where broadband is limited, compulsory online filing could be a burden.

The move is part of a wider general Government drive to move transactions from paper to online. There are plans to introduce a new online VAT registration service from October 2012, with the aim of making registering quicker and easier, and there are also consultations to move direct taxes online.

The consultation on the VAT proposal closes on 31 October 2011.