January 23, 2013 6:04 AM Subscribe
UK tax filter. Help, I registered for VAT by accident and I made a wee mess. How do I best get out of it?
posted by yoHighness to Work & Money (5 answers total)
I registered as a sole trader a few months back and then I made a series of clumsy mistakes.
Mistake 1 was I registered for VAT. But the business earns practically nothing and was not setup with an expectation to pass the VAT threshold anytime soon. I mistakenly assumed it was necessary to have a VAT number for invoices.
Mistake 2, when a VAT return was due, I filled in £60 online (21% of pocket change made during that period). I stupidly assumed filling in this small amount would result in a "No VAT due" calculation since the business earns well under the threshold of £18.000 and I never actually charged VAT from anyone.
Mistake 3, I should have kept at least some records of expenses, which I now could use to offset against that.
Mistake 4, I panicked and filled in a second return as a "NIL" return, i.e. £0 due, which someone from HMRC told me on the phone is not correct and could lead to penalties.
In any event I do seem to have managed to deregister for VAT.
Would it be worthwhile to write a grovelling snail mail letter to the VAT error corrections department to somehow amend these returns I sent online. How would I best explain this to them?
Or should I work a day to pay £60 for mistakes which I do admit were amazingly dumb, so I would bite the bullet if I have to?
I thought I'd ask for help here first so I don't mess this up any further. Which one seems the more successful strategy to you, writing to VAT error correction, or just paying up and hoping that this was it? It hasn't been a month yet since they sent the first invoice, how long do I have left to write to VAT error correction? How do I best speak to HMRC?
I know I should buckle up and spend a week reading through GOV.UK websites but to lie down in a dark room is all I've managed so far, so any suggestions and pointers to resources appreciated. Thank you!