MTD penalties are confirmed!

5 September 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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Homebuyers in Stamp Duty Sprint Before April Hike

by PH186232 • 20 February 2025

With the 1st April deadline looming, its reported that 550,000 homebuyers are racing to complete purchases before stamp duty jumps back to its 2022 levels. We have read that sales awaiting completion are up 25% from last year, with an average five-month wait putting pressure on buyers to beat the deadline. Currently, first-time buyers pay no stamp duty on homes up to £425,000 when purchasing a property worth up to £625,000, but from 1 st April, that drops to £300,000. The upper limit will also fall from £625,000 to £500,000. It's not just the first-time buyers taking a hit, currently stamp duty is only owed on amounts over £250,000, however from 1 st April, only the first £125,000 will be exempt. Despite the cost increase, it looks like most buyers are still pressing ahead, with some even renegotiating offers to offset the hike. According to our research, regardless of the impending cost increases, property experts such as Rightmove are predicting the demand to stay strong; especially if interest rates continue to fall. With mortgage rates already dipping below 4%, we believe buyers remain hopeful for a more affordable market ahead.