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Leniency over Making Tax Digital promised by HMRC

HMRC is indicating that it will adopt a lenient approach towards those struggling to sign up for and submit their returns under the new Making Tax Digital for VAT.

This comes in the wake of evidence showing that significant numbers are failing to get to grips with the new system. Three quarters of them are not even registered for it, even though the first deadline for submitting their digital VAT information is fast approaching. The reforms require all companies that have a turnover above the VAT threshold to keep digital VAT records and use software compatible with the HMRC site to file them.

The deadline for getting these returns submitted is August 7 – a little over a fortnight away – and over 1.2 million businesses in the UK are expected to file them digitally. Despite this, HMRC’s own data shows that many sectors are not dealing with the situation. One surprising stat revealed that just 25% of companies in the financial sector are signed up. By contrast, 50% of agricultural firms have completed registration.

Now, HMRC has said it will go easy on those that are having difficulties, as long as they are trying to address the issue, perhaps by speaking to an accountant in Liverpool or wherever they are located.

HMRC’s Making Tax Digital Director, Theresa Middleton, told Accountancy Daily that fines for records or filing delays would not be handed out in the first year unless companies have failed to set aside the money to pay their VAT or are deliberately failing to comply.

Posted by Mark
July 22, 2019

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