Reconsideration of the value of POA instalments: Increases in POA instalments
All businesses in the POA regime will have their instalments increased if their VAT liability has increased by 20 per cent since their previous instalment calculation. Any increase will normally be due to the submission of more recent VAT returns, but it could also be due to OAs or Voluntary Disclosures.
This is covered by VAT (Payments on Account) Order 1993, article 14.
A business is brought into POA based on the year to September 2016. In November 2016 an OA is raised for periods 06/14 and 03/16. The OA for period 06/14 is for a period more than 12 months prior to the latest POA calculation, so for the purposes of POA is ignored. However, the OA for 03/16 is used and if it increases the business’s liability by over 20 per cent, the POA instalments will be recalculated.