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Spring changes for VAT and PAYE


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Issued 29th March 2010

HM Revenue & Customs (HMRC) is urging businesses to get ready for major changes to VAT and PAYE coming in this spring.

The following VAT changes come into effect on 1 April:

·         VAT-registered traders with annual turnovers of £100,000 or more (excluding VAT) will have to file their VAT returns online and pay their VAT electronically;

·         All businesses registering for VAT from April will have to file their returns online and pay electronically;

·         All VAT cheque payments sent by post will be treated as being received by HMRC on the date when cleared funds reach HMRC’s bank account – not the date when it receives the cheque. Businesses must allow enough time for their cheque to reach HMRC and to clear its account no later than the due date shown on their VAT return, or they may be liable to a surcharge for late payment. However, this change does not affect any cheque payments made by Bank Giro; and

·         Anyone issuing an invoice that includes VAT, when they are not entitled to charge it, will be subject to a new VAT wrongdoing penalty. The penalty charged will be a percentage of the amount charged as VAT on an unauthorised invoice.

From May, two key PAYE changes come into effect:

·         All employers must file their Employer Annual Return (P35 and P14s) online by the 19 May deadline – there is no longer a paper filing option for small employers with fewer than 50 staff. File your return on paper, even if it’s before 19 May, and you could receive a penalty.

·         HMRC is introducing new penalties for late payment of PAYE. Under these changes, employers and contractors may incur penalties if they don’t make payments of PAYE, National Insurance contributions, Construction Industry Scheme deductions and student loan deductions on time, and in full. Penalties will be calculated as a percentage of the late amount and, for in-year payments, the percentage charged increases as the number of late payments in the year increases.

To file your VAT or PAYE online, you must first register with HMRC’s online services by visiting, clicking “Register” under the “New user” section and then following the instructions.

Stephen Banyard, Director of HMRC’s Business Customer Unit, said:

“If you’re a VAT-registered trader or an employer, make sure you’re up to speed with all the VAT and PAYE changes coming in this spring. If you’re well prepared for the changes, you’ll help avoid a last-minute rush when the new measures take effect.”

HMRC recently launched a ‘super podcast’ covering the VAT and PAYE online filing changes, as well as changes to corporation tax filing and payment coming in next year. It can be downloaded free from HMRC’s podcast pages at

Further information on all the changes is available on the HMRC website at

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© Crown Copyright 2010.

A licence is needed to reproduce this article and has been republished for educational / informational purposes only. Article reproduced by permission of HM Revenue & Customs under the terms of a Click-Use Licence. Tax briefs are updated regularly and may be out of date at time of reading.

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Article Published/Sorted/Amended on Scopulus 2010-04-02 09:48:09 in Tax Articles

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