ATT calls on HMRC to re-think MTD for VAT penalties 7 July 2022

The Association of Taxation Technicians (ATT) is urging the government to rethink the penalties for not complying with making tax digital (MTD) for VAT.

Under MTD VAT-registered businesses must keep digital records and use MTD-compatible software to submit their VAT returns unless an exemption applies. HMRC guidance published on 31 May outlines the penalties which businesses face for failing to meet these requirements including:

• penalties of up to £400 per return for failure to file using MTD-compatible software; and
• daily penalties of between £5 and £15 for failure to keep digital records or failure to use ‘digital links’ to transfer or exchange data between different pieces of software.

Senga Prior chair of ATT’s technical steering group said: ‘The penalties in question are not new measures introduced specifically for the purposes of MTD but are based on existing penalty legislation which has been in place...