Disclosing Card Transactions
If your business accepts debit and credit card payments, it is possible to miss payments off your return. How might a new disclosure facility help?
HMRC has introduced a new Card Transaction System Programme that allows businesses which accept card payments that have not declared all transactions on their VAT return to disclose them and take advantage of the best possible terms. This may mean that no penalty is applied to underpaid tax - and even if there is, it is likely to be lower than if the errors are disclosed or discovered outside of the programme.
HMRC gives examples of these under-declarations and includes a business accepting payments by card that might have not declared all of its income, or a business that is trading and has not registered with HMRC and accepts cards as payment method. These under- declarations could be down to simple oversight, of course
If you wish to use the disclosure facility you need to contact HMRC now to register for it. You will then have 90 days to quantify any under-declarations and notify HMRC of the VAT due. The formal steps are:
Tell HMRC that you want to take part in the Card Transaction Programme (notify)
Tell HMRC about all the income, gains, tax and duties not previously declared (disclose)
Make a formal offer
Pay what is owed; and
Help HMRC as much as possible if asked for more information
To benefit from the reduced penalties offered, HMRC will take account of the level to which your business helps it, and the accuracy of the information provided.
VAT Registration Threshold
From 1 April 2017, the VAT registration threshold has increased from £83,000 p.a. to £85,000 p.a. and the deregistration threshold has increased from £81,000 p.a. to £83,000 p.a. The same thresholds will apply to businesses required to register as a result of their level of EU acquisitions