From January 2017 the European Commission would like to make VAT returns monthly in all member states. Currently most UK businesses file quarterly, they only file monthly if they get regular refunds.
The European Commission see this as cutting red tape, but I am not sure how going from 4 returns to 12 returns cuts red tape?
The Commission say they have received complaints from companies who do business across Europe about confusion over the frequency of returns.
The EC is hoping to introduce a single format return, with just five mandatory boxes. This will include:
- input VAT;
- output VAT;
- net VAT payable;
- value of input transactions; and
- value of output transactions.
and there could be a concession for small businesses allowing them to continue to do quarterly returns.
Do you think monthly returns would be better or worse for UK Business?
2 thoughts on “VAT Returns may soon be monthly…”
It would improve fiscal discipline. I have worked in lots of small businesses for which a huge vat payment is a major worry. Having a lot of vat cash sitting around can take the eye off debtors which has to be caught up.
A classic example of unnecessary direction from Brussels. If it is really so good for us then business would be clamouring for the introduction of monthly reporting. I wonder whether the bureaucrats could name a single company that advocates this change due to “confusion over the frequency of returns” – they might advocate that everybody should move to quarterly reporting!