With the first monthly VAT submission due a few months ago in June and the first
quarterly MTD VAT submission due a few days ago on 7th August, we’ve heard of some
people who were still unaware they needed to comply. Will there be a raft of fines sent
out by the HMRC to businesses who haven’t submitted digitally or will there be any
The official notice on MTD for VAT introduced a ‘soft landing’ on penalties for the first
12 months, but this is only in respect of the digital links used for transferring or
exchanging data between programs, so claiming to be unaware of needing to submit
digitally will fall outside of this scope. Indeed HMRC have the power to charge a
penalty for failure to keep the required VAT records with a maximum
penalty of £500.
The HMRC also have the power to charge a penalty of up to £400 for filing a VAT return
other than electronically without their prior agreement (VAT regulations 1995 reg. 25A),
a power that’s not been used much but which will be extended to include using compliant
software to file.
Again, a ‘soft landing’ approach is expected but only when a trader has made reasonable
efforts to comply – saying you didn’t know you needed to is again unlikely to fit the
So if you find you should have gone digital but didn’t, please feel free to get in touch
and we’ll help you get on the digital track.