Who has to switch to online VAT Returns?

• you have an annual turnover of £100,000 or more (exclusive of VAT)
• you register or should have registered for VAT on or after 1 April 2010 (regardless of your turnover)

If you fall into either of the groups mentioned above, you will have to file all your VAT Returns online (including nil and repayment returns) even if your turnover drops below £100,000 in the future.

If your turnover is less than £100,000

You currently don’t have to submit your VAT Return online and pay VAT electronically if you registered for VAT before 1 April 2010 and your turnover stays below £100,000. However, you should note that it’s likely that all VAT-registered businesses will have to file their returns online and pay electronically by 2012, at the latest. So, you might want to switch to using the online service sooner – it will save you time and, in most cases, will give you extra days to submit your return and pay the VAT due.
For further information from HM Revenue and Customs click here