Accountancy firms have been informed by HMRC that the “soft landing” penalty waiver for Making Tax Digital for VAT will be removed from 1 November 2022.
All businesses that file their VAT returns monthly or quarterly must now sign up to Making Tax Digital (MTD) and use MTD-compatible software to keep their VAT records and file their VAT returns.
Penalties may apply if customers are not following the correct process to file their VAT returns using MTD-compatible software from 1 November.
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.
*If clients are already exempt from filing VAT returns online (though these exemptions are very rarely approved by HMRC), or if they or their business are subject to an insolvency procedure, they are automatically exempt.
More from our tax experts
You can find all of our latest tax articles and tax resources here.
If you are looking for advice in a particular area, please get in touch with your usual Hawsons contact.
Alternatively, we offer all new clients a free initial meeting to have a discussion about their own personal circumstances – find out more or book your free initial meeting here. We have offices in Sheffield, Doncaster and Northampton.
Related content
Hawsons Charity Football Tournament 2024
On Friday (12th July), we hosted our annual charity football tournament to raise money for Sheffield Cathedral’s Schools Singing Programme as part of the Master Cutler Challenge. We would like to thank the following firms for taking part in our tournament and helping...
Emma Stuart promoted to Assistant Manager
Hawsons are pleased to announce that on 1st July 2024 Emma Stuart was promoted to Assistant Manager in the Audit department of our Sheffield office. Emma joined the firm in 2020 on the firm’s graduate scheme, qualifying as a Chartered Accountant in 2023. During her...
HLB wins Network of the Year in 2024
We are pleased to announce that our International network HLB International has won the prestigious award of ‘Network of the Year’ at the International Accounting Forum awards ceremony in London. This is the third time that HLB have won this award in the last five...