MTD penalties are confirmed!

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MTD penalties are confirmed!

Sep 05, 2022

If you still submit your VAT returns via your gov.uk online account you need to be aware that HMRC have confirmed they will be issuing fines as of 1^st November for submitting your VAT in this old way. Making Tax Digital (MTD) is the new way of submitting your VAT returns via MTD compatible software such as QuickBooks or Xero.

As we have previously reported (read our blog here) all VAT registered businesses must sign up to MTD to keep VAT records and file VAT returns, the deadline was April 2022. Although the deadline has passed there is still time to get registered before facing a fine. There is an exception, HMRC have stated that any business that files annual VAT returns will still be able to use their old VAT online account until 15^th May 2023.

What could I be fined?

Any VAT registered business who files their VAT returns without using MTD software could be charged a Filing Through the Incorrect Channel (FTIC) penalty.

Fines are based on a company’s turnover and is per every return filed incorrectly, they are as follows:

£100 for turnover below £100,000
£200 for turnover between £100,000 and £5,600,000 inclusive
£300 for turnover between £5,600,001 and £22,800,000 inclusive
£400 for turnover is £22,800,001 or above

However, if you are already exempt from filing your VAT returns online or if you are subject to an insolvency procedure you will still automatically be exempt and therefore will not be charged a fine.

If you aren’t MTD ready, don’t panic. We have a number of different packages available to suit your needs and budget, check out our MTD for VAT page here or drop us a an email admin@booksandbusiness.co.uk

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Plans for ID verification from Companies House

by PH186232 • 22 Oct, 2024

Starting in early 2025, Companies House will begin rolling out new identity verification requirements for company directors and persons with significant control (PSCs). This means that, in the future, before filing information on the Companies House register, directors will need to prove their identity. This change is designed to reduce fraud and improve transparency. The reforms are part of the Economic Crime and Corporate Transparency Act 2023, which aims to combat fraudulent activity. As part of these reforms, accountancy firms and solicitors registered for anti-money laundering (AML) supervision will be among the first required to comply, starting in early 2025. By spring 2025, accountants and other professional service providers, who are registered for AML supervision, will be able to become authorised corporate service providers (ACSPs). This means they’ll be able to help clients verify their identities and pass that information on to Companies House. By autumn 2025, these new ID verification requirements will be mandatory for new directors and PSCs when setting up a company or making new appointments. If your business already exists, you will have a 12-month transition period until autumn 2026 to ensure your directors and PSCs comply with these requirements when your next confirmation statement is due. This is a significant change, therefore it’s important to stay ahead of these requirements to avoid any disruptions to your business.