MTD penalties are confirmed!
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 1st 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 15th 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
