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    HMRC confirms MTD penalties from 1 November

    HMRC is reminding businesses that from Tuesday 1 November, the soft-landing penalty waiver for Making Tax Digital for VAT will be removed, and existing online accounts for submitting VAT returns will not be available.

    All businesses that file their VAT returns monthly or quarterly must sign up to Making Tax Digital (MTD) and use MTD-compliant software to keep their VAT records and file their VAT returns.

    HMRC can charge a penalty of up to £400 for filing a return which is not an electronic submission from 1 November 2022.

    The amount businesses may be fined is dependent on their turnover. A penalty applies to each return filed incorrectly, and the penalty will be:

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

    Even if a business currently keeps digital records, they must check their software is MTD-compatible and sign up for MTD before filing their next return.

    If a business is already exempt from filing VAT returns online, or if the business is subject to an insolvency procedure, they will automatically be exempt.

    Get in touch

    If you have any questions in relation to becoming MTD compliant, including reviewing your current VAT procedures, guiding you towards a suitable solution, assisting with quarterly submission to HMRC and even providing training for your team, please contact your usual PM+M adviser or get in touch with Jill Morris using the button below.

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