{"id":2576,"date":"2022-06-23T11:36:41","date_gmt":"2022-06-23T10:36:41","guid":{"rendered":"https:\/\/kirkwoodwilson.co.uk\/?p=2576"},"modified":"2022-06-23T11:36:41","modified_gmt":"2022-06-23T10:36:41","slug":"making-tax-digital-hmrc-compliance-kirkwood-wilson","status":"publish","type":"post","link":"https:\/\/kirkwoodwilson.co.uk\/making-tax-digital-hmrc-compliance-kirkwood-wilson\/","title":{"rendered":"Making Tax Digital for VAT \u2013 New penalties for non-compliance"},"content":{"rendered":"\n<p>HMRC have issued guidance for VAT-registered business and their agents on how to avoid penalties for <a href=\"https:\/\/www.gov.uk\/government\/publications\/compliance-checks-how-to-avoid-penalties-for-making-tax-digital-for-vat-ccfs69\/compliance-checks-how-to-avoid-penalties-for-making-tax-digital-for-vat-ccfs69\">non-compliance<\/a> with the <a href=\"https:\/\/kirkwoodwilson.co.uk\/service\/digital-clinic\/\">Making Tax Digital<\/a> for VAT (MTD) rules.<\/p>\n\n\n\n<p>In particular, there is a new \u00a3400 per return penalty if you file a return but do not use functional compatible software.<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/mail.google.com\/mail\/u\/0?ui=2&amp;ik=38f3df0382&amp;attid=0.1&amp;permmsgid=msg-f:1736144995249737411&amp;th=181806acb86ecec3&amp;view=fimg&amp;fur=ip&amp;sz=s0-l75-ft&amp;attbid=ANGjdJ-CBKNlGKE6-pbStiIpjT4lU8wNj7syQ2H4j_4DExKx4aeTWjF1h-X2Jwgq5LyNg76QPNZ61D6ELhpMntYaag19wwEPLvOy7xV0Ksf_wtfFk3bVhLV2Syasd98&amp;disp=emb\" alt=\"A picture containing text\n\nDescription automatically generated\"\/><\/figure>\n\n\n\n<p>There are additional penalties if the business does not keep its records digitally. HMRC may charge you a penalty of between \u00a35 to \u00a315 for every day on which the business does not meet that requirement.<\/p>\n\n\n\n<p>Key extracts from HMRC guidance include:<\/p>\n\n\n\n<p>You must file your VAT return using functional compatible software<\/p>\n\n\n\n<p>Functional compatible software means a software program, or set of software programs, products or applications (apps) that can:<\/p>\n\n\n\n<ul><li>record and store digital records.<\/li><li>provide HMRC with information and VAT returns from the data held in those digital records.<\/li><li>receive information from HMRC.<\/li><\/ul>\n\n\n\n<p>You must keep records digitally<\/p>\n\n\n\n<p>You must keep some records digitally within your functional compatible software. This is known as your \u2018electronic account\u2019. Your electronic account must contain:<\/p>\n\n\n\n<ul><li>your business name, address and VAT registration number.<\/li><li>any adjustments from calculations you make outside your functional compatible software for any VAT accounting schemes you use.<\/li><li>the VAT on goods and services you supplied, meaning everything you sold, leased, rented or hired (supplies made).<\/li><li>the VAT on goods and services you received, meaning everything you bought, leased, rented or hired (supplies received).<\/li><li>any adjustments you make to a return.<\/li><li>the \u2018time of supply\u2019 and \u2018value of supply\u2019 (value excluding VAT) for everything you bought and sold.<\/li><li>the rate of VAT you charged on goods and services.<\/li><li>your reverse charge transactions, where you record the VAT on the sale price and the purchase price of the goods and services you buy.<\/li><li>copies of documents that cover multiple transactions made on behalf of your business, like those made by volunteers for charity fundraising, a third-party business or employees for expenses in petty cash.<\/li><\/ul>\n\n\n\n<p>All transactions must be contained in your electronic account, but you do not need to scan paper records like invoices and receipts.<\/p>\n\n\n\n<p><a href=\"https:\/\/kirkwoodwilson.co.uk\/about\/\">Our team<\/a> at Kirkwood Wilson are here to support you with your <a href=\"https:\/\/kirkwoodwilson.co.uk\/service\/digital-accounting\/\">digital accounting<\/a>, and help you prepare with the latest compliance. If you would like to learn more please <a href=\"https:\/\/kirkwoodwilson.co.uk\/contact\/\">contact us<\/a> for simple and straightforward <a href=\"https:\/\/kirkwoodwilson.co.uk\/service\/business-advice\/\">business advice<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>HMRC have issued guidance for VAT-registered business and their agents on how to avoid penalties for non-compliance with&#8230;<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[11,19],"tags":[],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.8 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Making Tax Digital for VAT \u2013 New penalties for non-compliance | Kirkwood<\/title>\n<meta name=\"description\" content=\"Discover the latest information from HMRC with Kirkwood Wilson. Find out about how to avoid penalties for non-compliance with MTD.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/kirkwoodwilson.co.uk\/making-tax-digital-hmrc-compliance-kirkwood-wilson\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Making Tax Digital for VAT \u2013 New penalties for non-compliance | Kirkwood\" \/>\n<meta property=\"og:description\" content=\"Discover the latest information from HMRC with Kirkwood Wilson. 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