VAT Registration chaos - compensation for small businesses?

In early July we reported that delays in routine registrations for VAT are getting worse and are now typically taking three or four months, up from two months last year, and around two weeks a few years ago.

Earlier this month, The Tax Faculty of the Institute of Chartered Accountants (in England and Wales) called for action over the problems caused by the severe delays in new registrations.

According to the ICAEW, the Government, HM Treasury and HMRC are aware that the continuing and increasing delays in processing VAT registrations are damaging to business, both in time and cost.

The ICAEW claims that the recent delays have been caused by increased vetting to prevent fraud - the new scale of checks having been implemented without ensuring that adequate personnel resources were in place.

The Tax Faculty also suggested that this matter is of such importance that it should be the subject of an inquiry by a Parliamentary Committee

Other recommendations include providing compensation for businesses that suffer financially as a result of the delay.

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Sign Up! - Make sure you sign up to our FREE weekly newsletter for the latest tax news and advice for small companies. Posted August 20, 2007

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