The UK has introduced MTD to create a modern, streamlined digital tax system making it easier for businesses to file their VAT returns, get their tax right, and keep on top of their affairs. It also reduces the administrative burden on the UK tax authority HMRC, as it aims to become one of the most digitally advanced tax administrations in the world.
Currently, MTD is mandatory for businesses registered in the UK with gross sales revenue exceeding £85,000. HMRC has extended the MTD platform to cover all UK VAT registered businesses from 1 April 2022.
A default surcharge of up to 15% of any VAT due that is paid late
Up to 100% of any VAT understated or over-claimed if a VAT return contains a careless or deliberate inaccuracy
Up to 30% of an understated assessment of VAT due if HMRC isn’t informed within 30 days that it’s incorrect
£400 for submitting a paper VAT return without an exemption
Keeping up with VAT compliance obligations becomes more difficult in practice as the UK continues to take steps to reduce its VAT Gap and modernize the system.
Our experts continually monitor, interpret and codify changes into our software, reducing the compliance burden on your tax and IT teams.
Learn how Sovos’ solution for VAT compliance challenges can help you stay compliant.