Double Easter – Eggstra VAT?

Many guesthouses make a conscious decision to remain under the VAT threshold, which now sits at £79,000 as of 1 April 2013.  For those businesses that decide to remain under the threshold, monitoring sales on a monthly basis to ensure that the threshold is not breached is important. 

This year, for the first time since 2008, Easter came early and could potentially put businesses who historically have a high level of sales over Easter bank holiday weekend over the VAT threshold.  In 2012 Easter fell on 6-9 April, in 2013 Easter Sunday was on 31 March.  This means that in a rolling 12 month period to 31 March 2013, both of these Easter weekends need to be counted in the cumulative sales totals.

If you are concerned that you may have gone over the threshold temporarily the important issue is to deal with it quickly.  If you are confident that the breach of the threshold is only temporary you can apply to HMRC on this basis to give you an exception from registration, by writing to them and outlining why you will remain under the threshold.  Alternatively, you can register for VAT and then de-register in due course quite quickly.  If you have breached the limit and do neither of these, then you will be liable for VAT from the start of the following month until you take action.  If you wait until your year-end accounts are prepared to look at this, potentially significant liabilities could be incurred over the summer season.

If you have annual turnover just below the threshold and would like to speak to us in more detail please do not hesitate to contact Jackie Kirsopp on 01228 530913.

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