UK VAT registered businesses offered chance to submit outstanding returns

The UK’s tax authorities, HMRC, has issued a warning that it will implement new legal powers and stiff penalties on companies which have not brought the UK VAT returns up-to-date by 28 February 2013.

Foreign companies providing taxable supplies in the UK may have to register as non-resident traders with HMRC.  Typical situations where this VAT compliance obligation may be required include:

• Importing into the UK
• Running live exhibitions or similar events and charging entrants at the door
• Selling from elsewhere in the EU to UK consumers over the internet as distance sales
• Certain levels of intra-community trading, which means selling to other EU VAT registered businesses in EU countries

Increasingly, the UK and other European tax authorities are looking towards raising much needed tax revenues through audits of non-compliant businesses, and looking for non-deductible VAT.  Investigations in the UK and Germany in particular have risen sharply, and Belgium has recently hired over 100 additional tax inspectors to work on audits.

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