New reporting requirement for FRS businesses
New reporting requirement for FRS businesses
HMRC’s latest Business Brief sets out the new rules which will apply for VAT return periods commencing on or after 1 June 2022.
The change is needed to correct HMRC’s previous guidance regarding FRS-registered businesses that used postponed accounting for imports rather than paying VAT at the point of entry to the UK. Previously HMRC's guidance was to include the value of imports in their FRS turnover, whereas the legislation says it should be excluded. As a result, many businesses have underpaid VAT, while some have overpaid. The good news is that HMRC is not asking businesses to repay any VAT that has been underpaid as a result of its earlier guidance but will allow those that overpaid to claim a refund.
All FRS-registered businesses using postponed accounting must from the beginning of June 2022 exclude the value of imported goods from their turnover liable to the FRS rate. Instead, they must work out the VAT payable at the normal rate applicable to the goods and include this amount in Box 1 of their returns.
Related Topics
-
Tribunal rejects reliance on adviser as reasonable excuse
A recent First-tier Tribunal decision has confirmed that relying on an accountant does not automatically amount to a reasonable excuse for missing a self-assessment deadline. The case highlights the limits of delegating tax responsibilities. What does this mean in practice?
-
HMRC issues new wave of offshore “nudge” letters
HMRC has issued a further round of “nudge” letters targeting individuals it believes may have undeclared offshore income or gains. The letters form part of HMRC’s ongoing use of data from international information exchange agreements. What should you do if you receive one?
-
Payroll changes for 2026/27
As the end of 2025/26 draws closer, HMRC has published a raft of updates and reminders for employers. Which changes do you need to be aware of that might impact your payroll in 2026/27?
This website uses both its own and third-party cookies to analyze our services and navigation on our website in order to improve its contents (analytical purposes: measure visits and sources of web traffic). The legal basis is the consent of the user, except in the case of basic cookies, which are essential to navigate this website.