
HMRC has announced that penalties will be issued to those not completing VAT returns through Making Tax Digital (MTD) from 1 November 2022.
Anyone who files a VAT return through non-electric submission will face penalties of up to £400.
The Association of Chartered Certified Accountants warned that a points-based penalty scheme has been proposed for MTD for VAT and self-assessment income tax (MTD for ITSA).
These changes will apply to VAT customers for accounting periods on or after 1 April 2022, and to ITSA customers with a turnover above £10,000 every year for accounting periods starting on or after April 2024.
The penalty system will work as follows:
a default will be recorded for any mistakes or late MTD filing.
taxpayers will enter a surcharge period for 12 months if they make another error or fail to submit a return. A percentage of the money owed will be charged as a fine.
each new fault will accrue further points.
points will be translated into a percentage charge, between 2% and 15%.
Talk to us about Making Tax Digital today.
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