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Shepherd Partnership

Details of MTD penalties have been issued


HM Revenue & Customs have now issued further guidance on Making Tax Digital (MTD) for VAT, including details of the penalties which will apply.

Unless you are digitally excluded and have a valid exemption, VAT returns must be filed using compatible software which not only records transactions digitally but also submits your VAT return directly to HMRC from within it. If returns are filed not using functional compatible software, HMRC may charge a penalty of up to £400 for every return filed through other means.

If you fail to keep records digitally, HMRC may charge a penalty of between £5 to £15 for every day on which this requirement is not met.

You must also use digital links to transfer or exchange data if you use more than one system to record data. Please note that the use of ‘cut and paste’ or ‘copy and paste’ to select and move information is not a digital link. Failure to use digital links to transfer data between pieces of software could result in HMRC charging a penalty of between £5 to £15 for every day this requirement is not met.

If you are not yet signed up to Making Tax Digital for VAT, please get in touch with us so we can guide you through to process and avoid or minimise any penalties

Further information can be found on gov.uk

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