The Government introduced Maxing Tax Digital (MTD) back in 2019 and this was done to provide a simplified system for individuals and businesses to complete their tax correctly on a fully digital tax system.
MTD was made mandatory for VAT-registered businesses and organisations with taxable turnover above the VAT threshold (£85,000). This includes sole traders, partnerships, limited companies, non-UK businesses registered for UK VAT, trusts and charities. However, there was a six-month deferral for the start of MTD for more complex businesses (October 2019). There was also a delay for the roll-out of the next stage of MTD from the Government due to Covid-19.
What is changing?
Being introduced from April 2022, MTD is mandatory for all VAT-registered businesses and organisations. This will not impact your deadline for sending in your VAT returns after transferring to Making Tax Digital for VAT.
How will this benefit me?
We know that change can be quite daunting, however MTD and the accounting systems will benefit your business or organisation. The option to link your bank account and any relevant paperwork to your accounting software means that you do not have to manually input data as much allowing for fewer human errors. The time saved from this new process will allow you to focus on what you do best and continue to build your business.
Will there be any Fines and Penalties?
The UK has introduced a new penalty system for the introduction of MTD for VAT. This new system will:
- create a record of any missed filing or failure to observe the MTD rules
- you will then enter a surcharge period, lasting 12 months, if you have another fault
- the point system will then create a percentage increase in surcharges for each additional fault, starting at 2% and increasing to 15%
On top of the penalties for late submissions, there will also be fines and interest charges. For returns with deliberate inaccuracies, you may risk getting a fine totalling the full amount of the VAT due or over-claimed. Also, if you do not inform HMRC about the raised assessment being too low, you may be fined 30% of the return.
How can we help you at BK Plus?
We are here to simplify the process fir you which in turn means less time consuming to do your returns so that you avoid any penalties or fines. With our expert team, we can assist you with:
- signing up to MTD (including transferring your records to compatible software and submitting VAT returns)
- checking your tax returns are correct and submitting them on your behalf
- helping with the running and security of the compatible software that your records on
- answering any queries you may have on MTD for VAT
If you have any queries regarding the MTD for VAT or anything else, please get in touch with us at email@example.com