MTD - HMRC Consultation on Interest and Penalties

New consultation document has been issued on 20 March

Didn't find your answer?

The consultation can be found here

https://www.gov.uk/government/consultations/making-tax-digital-sanctions...

Some good and bad to be found amongst the document. I did notice there is a fair bit of talk about annual submissions though only attracting penalties after a second failure and that did make me wonder whether there might be a larger body of businesses set to fall into that annual submission category...... we can only hope!

Beyond that though, where quarterly filing applies, then the greatest reason for failure is likely to be that there is such a short window to deal with that filing e.g. one month.

In my opinion if HMRC want credibility in applying penalties for late quarterly filing then they should simply extend the quarterly submission deadline (where it applies to Income and Corporation Tax) beyond just one month to remove that excuse because, and I don't think I speak alone, that is the one barrier that makes the whole concept of MTD such a nightmare to consider.

How many of us will respond to this consultation and what is the consensus as to which of the 3 options offered by HMRC works best?

Replies (4)

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By youngloch
20th Mar 2017 15:35

This makes for interesting reading too - only had a quick glance but suggests further technical consultation in the Summer?

https://www.gov.uk/government/publications/bringing-business-tax-into-th...

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Replying to youngloch:
Tornado
By Tornado
20th Mar 2017 16:52

I have had a quick look as well and all that I can see is the legislation to give the Government powers so that they 'may' take a significant number of actions, but what is missing is any actual detail about how MTD will be operated.

It does look as though we will have to wait until the summer for any further consultations and presumably until then, we will still have no idea about the detail that we really need now.

I only carried out a quick check through the Bill but I guess AWEB will take a much closer look and provide us with a more informed summary in the near future.

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By ireallyshouldknowthisbut
20th Mar 2017 17:28

What I did like about that was that it confirms there are no penalties in the first year a client is eligible for MTD

Which effectively gives everyone a year later than stated to comply.

Why do it if there is no penalty?

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Phil Nickson
By Philip Nickson
21st Mar 2017 12:09

I have just received an email from HMRC advising me about their latest consultation document. It was "nice" to learn that they have come clean and it's nothing to do with making tax digital but extracting the maximum possible in fines and penalties. This is their email:

Yesterday (20 March) HM Revenue and Customs published a further consultation relating to Making Tax Digital.
Making Tax Digital – sanctions for late submission and late payment is open for you to respond until 11 June 2017. The consultation seeks views on 3 possible models for late submission penalties and provides an update on penalty interest.
In our Summary of Responses to last year’s Making Tax Digital: Tax Administration consultation, the government committed to getting the late submission model right recognising that more work needed to be done. The government also stated that people will be given at least a year to get use to a new penalty regime in relation to their Making Tax Digital for Business obligations.
We’d like your help in getting the model right and although we don’t ask specific questions on penalty interest in this consultation, you are welcome to feed in any further views on that too.
Whilst the proposals for late submission penalties have been developed with the new Making Tax Digital for Business obligations in mind, the consultation also explores the suitability of the sanctions for other regular submission obligations such as for Corporation Tax, Income Tax and VAT.

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