Guidance on VAT

[shilu-patel@talk21.c]

Value Added Tax

The VAT return for 3 months to 31 December 2003 showed output VAT of £50000 and input VAT of £35000. The VAT return and VAT payable were received by Customs and Excise on 16 February 2004. My brother (business partner) and I have recently discovered that the output VAT should have been £72000.

A friend has told me that we may be liable to a default surcharge penalty or to a misdeclaration penalty.

Are their any simple computations that will help me decipher if we are liable or not, and if so, how much we will have to pay Customs and Excise.

[Ian McTernan CTA]

You need to contact Customs and explain the error, and they will guide you through the process of paying the additional tax and also charge you a penalty and interest on the misdeclaration.

Ian McTernan CTA
McTernan Associates Ltd
Chartered Tax Advisers
ian@imcternan.com