HM Revenue and Customs (HMRC) has confirmed it will relax its current ruling requiring all VAT returns to be filed online, in a move that campaigners for tax fairness have welcomed with open arms.
The decision was made following a recent consultation after a court found that the online-only ruling infringed business owners’ human rights. HMRC has revealed it will allow telephone and, in some cases, paper filing.
UK firms will be allowed to file their VAT returns over the phone where they can satisfy the department that it is not reasonably practical for them to file electronically; breaking barriers and frustrating red tape for SMEs in particular.
Similarly, if there are reasons such as age, disability or remoteness of location that also make it impractical for the taxpayer to file their VAT return online or via telephone, they will be allowed to do so on paper.
Businesses refused the chance to file their VAT return over the phone or on paper will have a right of appeal to HMRC’s decision.
Anthony Thomas, of the Low Incomes Tax Reforms Group – designed to support traders whose rights are infringed – believes the relaxation of VAT return rules was the culmination of two years of hard campaigning.
“Until now, online returns have been mandatory unless the taxpayer is a practising member of a religious society… or a business in insolvency,” said Thomas.
“[But] that requirement breached the human rights of those who were unable to file online because they were computer illiterate due to age, or had a disability that made using a computer accurately very difficult or painful, or they lived too remotely for a reliable internet connection.”
Mr Thomas added it was “regrettable” that business owners, their advisers and taxpayers in general have had to wait so long for a “sensible and rational” outcome.
HMRC will soon be publishing guidance on its dedicated VAT return phone line, which will let taxpayers ring them instead of having to use the existing ‘call back’ service.
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