Still not signed up for MTD VAT filing?
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Have you received a letter from HMRC about Making Tax Digital?


The majority of VAT-registered businesses with turnover above the VAT threshold were required to keep their records digitally for periods starting on or after 1 April 2019, sign-up to the service and submit their first quarterly return to HMRC direct from software by 7 August.

While under normal circumstances, non-compliant businesses could have expected a fine of up to £400 for digital tax foot-dragging, HMRC has stated that it will be taking “a light touch” to penalties in the first year of MTD.

The Revenue puts this softly-softly approach down to a wish to help businesses with the transition especially at a time when they are fully focused on preparations for leaving the EU.

HMRC will not issue filing or record keeping penalties where businesses are doing their best to comply. However, according to Revenue guidelines sanctions will remain in cases of “deliberate non-compliance” in order to “safeguard VAT revenue”.

Letters to Latecomers
Instead of penalties, HMRC is instead in the process of sending email reminders to businesses yet to register with the new programme. It will also send letters to those that missed the first filing deadline.

The letters will point latecomers to the MTD regime to HMRC’s customer service channels, including its webinars and online guidance, which can be found on GOV.UK, and walkthrough videos on YouTube.

Penalty Levels
While the tax authority confirmed back in February 2019 that it will be taking a light-touch approach to penalties during in the first year of Making Tax Digital, under the current regime penalty levels are linked to the gross turnover of a VAT-registered business and are laid out as follows:
  • Total Turnover = £22,800,001 and above then the maximum penalty is £400
  • Total Turnover = £5,600,001 to £22,800,000.99 then – £300
  • Total Turnover = £100,001 to £5,600,000.99 then - £200
  • Total Turnover = £100,000.99 and under then - £100
Businesses can sign up for MTD on GOV.UK. If paying by Direct Debit, businesses should sign up at least seven working days before a return is due. If not paying by Direct Debit, businesses should register at least 72 hours (three days) before their return is due.

If you have received a letter from HMRC regarding MTD and need help then contact us. Enjoy a friendly, jargon-free discussion without obligation. Call 01462 791079.

*** Special offer  - try KashFlow online bookkeeping FREE for four months. It's perfect for Making Tax Digital, saving time and stress. Ask us for details! ***

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