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HMRC Penalties – Making Tax Digital (MTD)

Date posted: 17th Jul 2019

HMRC have begun issuing letters to businesses that have not registered for Making Tax Digital for VAT (MTD for VAT) where they believe registration is required. The letters carry messages such as “if you do not sign up before the deadline for submitting your next VAT Return, we will treat you as if you meant to miss it.”

Whilst the outcome of missing the sign up for MTD for VAT deadline is not clear, these letters allude to HMRC pursuing penalties for businesses that have failed to register that should have done. For example these could be a general regulatory penalty, record keeping penalty or filing method penalty.

HMRC have said that no penalties will be pursued specifically for the ‘digital links’ requirement of Making Tax Digital until April 2020. However businesses can still suffer other forms of penalty or indirectly from failure to be able to submit returns before their deadlines.

Since 1 April 2019, VAT registered businesses with an annual taxable turnover above the VAT threshold of £85,000 have been required to keep digital records for all VAT transactions and use software to submit VAT returns commencing on or after 1 April 2019 digitally.

If you need any further advice on how MTD, then contact our team today.


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