Business NewsFlooring Headlines

Response To Late MTD Payment Sanctions

The Chartered Institute of Taxation (CIOT) is calling on HMRC to allow taxpayers a limited number of defaults before incurring a late payment penalty under Making Tax Digital (MTD).

Most businesses, self-employed people and landlords will be required to use digital accounting software to keep and file tax records on a quarterly basis from next year.

The new system is set to roll out from April 2018 for those with an annual turnover exceeding the VAT threshold (£85,000).

Businesses with annual turnover below this threshold are exempt until April 2019, while those with a turnover of £10,000 or below are exempt from the changes.

In a consultation, HMRC set out 3 possible models to penalise late payments and submissions. It intends to implement 1 of the following models:

  • Model A – points-based system where the individual would incur a penalty when a certain points threshold is reached
  • Model B – automated review system looking over someone’s compliance with their submission obligations after a set period of time
  • Model C – suspension of penalties where someone can avoid having to pay a penalty by provide a late submission.

In response, the CIOT said Model C is a “proportionate response” to late filing and is more likely to penalise non-compliance.

Adrian Rudd, spokesperson at CIOT, said:

“The suspension model most closely complies with HMRC’s penalty principles, which include that penalty regimes should be designed from the taxpayers’ perspective, primarily to encourage compliance and prevent non-compliance, and that penalties are not to be applied or seen to apply with the aim of raising money.”

For any help or advice with financial planning talk to RPD

Show More

Floors Magazine brings you daily flooring news, features, tenders, events, jobs and everything in-between.

Related Articles

Back to top button