The UK’s tax authority, HMRC, has changed the procedure of VAT assessment by foreign online marketplaces. The new system came in place this September, speeding up simplifying the VAT returns corrections for the HMRC. The updated method is based on the premise that, in most cases, HMRC already has the information to prepare an accurate assessment.
Prior to this September, traders that have submitted inaccurate returns used to be prompted to submit additional data and corrections. Now, the HMRC has begun sending VAT assessments based on their data, prompting the companies to either agree with the assessment or appeal them and submit corrected information or proof later.
The assessments sent by the HMRC will cover VAT returns up until December 2020. Together with the review, companies will receive instructions on what to do if the assessment seems to be wrong or additional information needs to be provided.
After receiving the assessment, the traders will be assigned a period for paying the VAT. This deadline will be extended if a reason is provided in a time-to-pay agreement with the HMRC. If an online seller misses the deadlines, a liability notice will be provided to the online platform where the company is selling, resulting in banning the sellers’ accounts until the VAT issues are not resolved. After the payment, it can take up to 6 weeks until the sales are allowed to resume. Therefore, inaccurate returns and delays in payment can significantly disrupt the seller’s business operations.
Having this in mind, sellers must take extra care not to submit inaccurate accounts. 1stopVAT’s team can help you ensure maximum VAT compliance.