Catch Up With Returns Before HMRC Catches Up With You!
The question is, should Farmers submit VAT Returns on time? As most farmers have repayment VAT returns, it is usual practice, especially when busy with planting, harvesting, lambing etc, to wait until they have a few quarters-worth of VAT to submit.
However, be aware!
Prior to the new penalty arrangements in 2012, late repayment returns did not attract a financial penalty although the surcharge period did extend.
Since 2012, however, there are penalties for late filing in addition to late payment penalties. Therefore, it is possible to have a late filing penalty, even if the return is for a repayment.
We still haven’t seen HMRC issue a penalty for late filing, possibly because their systems can’t cope! However, we are now seeing assessments raised for farmers who haven’t submitted returns, even though they usually have a repayment return. We’re sure this will be closely followed by penalties.
The penalties for late filing of quarterly returns are:-
- First late return – £100 penalty
- Second late return – £200 penalty
- Third late return – £300 penalty
- Fourth late return – £400 penalty
Therefore if you’ve held on to your VAT returns for a year, you could possibly incur a total penalty of £1,000!
If you submit monthly returns, the penalties are £100 for the first 6 late returns and £200 for subsequent returns. Again, submitting 12 returns late could incur a total penalty of £1,000!
Our advice is catch up with the returns before HMRC catches up with you!
Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.