The BKN Blog

Are you already filing your clients VAT returns online? If not, then you need to prepare to switch to online filing for all of your clients as this will be compulsory for all VAT registered businesses from 1 April 2012. Don't leave this task until the last minute as it can take a few weeks to receive the unique user ID and/or your Clients Authorisation you will need from the Tax Office in order to file their VAT Returns electronically.

Your clients will no longer be able to pay their VAT due by cheque. They will have to pay by electronic means. This includes using a direct debit, bank-transfer such as CHAPS or BACS, a personalised bank giro payment slip paid in at a bank (these need to be ordered in advance), or a debit card or credit card over the internet.

The good news is that Tax Office has now instructed its bank to accept tax payments by the faster payment service. This means the tax or VAT due by your clients will take less than a day to clear from their account to the Taxman's bank account. Before relying on this shorter timescale, check whether your clients bank account is set-up to use the faster payment service and if any money limits apply. Many bank accounts can only pay out up to £10,000 by electronic payments in one day. If your clients VAT bill exceeds that cap they may have to spread the payment over several days, or talk to your bank about other transfer methods.