The Minister for Finance announced in the budget that smaller businesses can submit VAT returns less frequently. From 1 July 2007 businesses with a yearly VAT liability of €3,000 or less may submit bi-annual returns; and from 1 September 2007 businesses with a yearly liability between €3,001 and €14,400 may submit tri-annual returns.

In order to qualify for the new basis of submitting VAT returns, you have to do nothing! Revenue will be writing to all those taxpayers who qualify. However, if you wish to continue submitting bimonthly VAT returns, then you can opt out. This is very similar to the approach taken by Revenue when the option to file quarterly PAYE returns was introduced last year.

Bi-annual will commence on 1 July 2007 and the first VAT period will be from 1 July 2007 to 31 December 2007 (the May/June 2007 period being the last bimonthly return submitted) and tri-annual will commence on 1 September 2007 and the first VAT period will be from 1 September 2007 to 31 December 2007 (the July/August 2007 period being the last bimonthly return submitted).

Revenue have advised that they will take a pragmatic approach to taxpayers who exceed the thresholds and that the responsibility to cancel out of the new bases rests with them and not the taxpayer.

We will keep you posted on the latest news on this development.