HMRC recently published details of the penalties system for late submissions and payments under Making Tax Digital, confirming it plans to pursue a points-based model.
Under this model, taxpayers would receive a point every time they fail to submit on time. A penalty will be charged at a certain threshold, which will be dependent on the frequency of their submission obligations. After the threshold has been reached, a penalty will be charged for every subsequent submission failure.
The penalty thresholds put forward are:
- 2 points for annual submissions,
- 4 points for quarterly submissions and
- 5 points for monthly submissions.
One amendment to the model following the consultation is that penalty points will have a shelf-life and would expire after a period of good compliance.
Periods of good compliance were outlined by HMRC as:
- 2 submissions for annual submissions,
- 4 for quarterly, and
- 6 for monthly.
HMRC have said they will make penalty points and actual penalties appealable, and give taxpayers the option to claim a reasonable excuse for failing to meet a filing obligation.
Which may well open up a can of worms, given how many appeals are likely to be lodged as a result of the increase obligations on the hapless taxpayers under MTD>
Tax does have to be taxing.
Professional Cover Against the Threat of Costly TAX and VAT Investigations
Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.
Ken Frost has negotiated a 10% discount on any polices that may suit your needs.
However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.
What is Solar Tax Investigation Insurance?
Solar Tax Investigation Insurance is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.
To find out more, please use this link Solar Tax Investigation Insurance
HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"