Watch out for VAT changes, HM Customs and Excise tells garden centres

HM Revenue & Customs (HMRC) is urging businesses including garden centres to be aware of major changes to VAT and PAYE this spring.

The following VAT changes came 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.

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