So there are no penalties for a year, except there could be!
Ive a client who - actually - has just signed up, but hadn't because they left it a bit too late for the DD so they did as advised by HMRC and waited. There's no problem with this one as they are digitalised from April, it was just the timings for MTD set up. However, they have receieved a letter thats interesting.
It says if they miss another quarter they will be treated as if they meant to miss it.
So, de facto, they could be penalised for not signing up i.e not engaging with MTD.
However, if you do sign up you have to file under MTD - so non-compliance penalties wouldn't be an issue anyway.
Doesn't this mean HMRCs "no penalties for a year" are actually nothing of the sort. They are "no penalties for a quarter". Or , if not, the letter when it says they will be treated as is they meant to miss it, is an empty threat.
Anyone would think I had no work to do!