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| CURRENT SECTION :: Money News | UK's most visited IT Contractor Site - 250k unique visitors March 2008 |
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Delays to registering for VAT with HM Revenue & Customs are “unacceptable” – the government has admitted for the first time. John Healey, the former Treasury minister, made the admission to a Commons debate on the backlog of VAT requests, which applies to online and offline submissions. The delays to processing VAT requests, caused in part by extra fraud checks, were now causing problems for legitimate businesses, Mr Healey said. A multi-pronged strategy to reduce the queuing time for VAT applicants, which is about 38 days, has been tabled, and should prove successful by the autumn, he added. This includes assigning a taskforce to deal with “high-risk” applicants and making “necessary improvements” to HMRC’s computer system. Experts at the Institute of Chartered Accountants for England & Wales want people registering for VAT to feedback their experiences to its Tax Faculty. The Faculty says the delays have hit the Wolverhampton registration office, and confirmed that Newry is to close, a move HMRC accepts will cause further delays. In an appeal for applicants’ experiences, it said: “Please keep them [your comments] coming over the summer. “We know everyone is busy with their day job, but the more evidence we obtain, the greater the impact and the more likely it is that we can encourage HMRC to prioritise this issue and take action to reduce the delays.” The Faculty wants to know the general approach of staff processing requests, and whether they ask non-VAT-related questions, such as those about income tax. HMRC has said there is a temporary worsening of the VAT backlog due to 20,000 applications received from newly-incorporated companies, as a result of the managed service companies rules in the Finance Bill 2007. Earlier this month, the government admitted that the enforcement of the Intermediaries Legislation (IR35) – dubbed ‘the freelancers' tax’ – had been “patchy.” Like the hike to the small companies’ tax rate, Dave Hartnett of HMRC heard that IR35 was seen by advisors as a legal “sticking plaster” to paper over the cracks in the tax system. Jul 9, 2007 Email this article Printer friendly page Previous Page
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