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Making Tax Digital back on agenda following feedback

In spite of the confusion following the recent general election, Making Tax Digital (MTD) will go ahead as planned.

HMRC is getting ready for the new initiative by ironing out the finer points. MTD, which is designed to combat late submissions through the introduction of a payment penalty system, will be in place in April 2019. That will come after a grace period, which will last for 12 months, to provide customers with the opportunity to become accustomed to the policy.

HMRC sought feedback on three methods of dealing with late submission.

The first method revolved around points, where customers would be assigned points for each late submission.

The second would see HMRC implement automated regular reviews of customer compliance, with customers penalised based on a compliance record.

The third model was a system of penalty suspensions, where HMRC would grant the customer an extension, in the first instance, to avoid being penalised.

Yyvette Nunn from ATT, the professional body for tax compliance services, said:

“We see it as the simplest for taxpayers to understand, the fairest in that it quickly alerts taxpayers to what they need to do to avoid a penalty and the most effective in encouraging a return to compliance following a taxpayer’s submission failure.”

Businesses will want to be more vigilant than ever over submitting their accounts on time if they are to avoid late payment penalties. Employing the services of an accountant in the Wirral would no doubt be a wise move in the current climate.

Posted by Louise
June 21, 2017

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