Submitting your VAT returns online could become compulsory for all SMEs and owner-managed businesses, no matter what level of turnover they are seeing, if they are a new start-up or a long-established business.
Currently only businesses turning over more than £100k are required to fill in VAT returns online. Therefore if the scheme is extended to cover all businesses, start-ups would be included.
If the idea is received positively during the consultation period currently running up until the end of October 2011, it could be implemented as soon as April 2012.
Although the idea of filling in VAT returns online would seemingly show the government trying to remove bureaucracy and improve efficiency levels, the system currently in place isn’t necessarily up to scratch yet, according to the Forum of Private Business (FPB) spokesman Phil McCabe.
Phil McCabe emphasised this further, “In principle I can understand the usefulness of online filing, but those systems have to be fit for purpose first – and all the indications are that they aren’t".
The FPB also recently released a report detailing how the current online tax return system set up by the HMRC has glaring deficiencies.