HM Revenue & Customs (HMRC) has confirmed that their new points-based penalty regime will come into effect from 1 April 2022 and will apply to both Making Tax Digital (MTD) for VAT as well as MTD for Income Tax Self Assessment (ITSA). Their stated aim is to make penalties simple, fair and effective but, as the arguably illustrious ageing rocker, Meat Loaf might say, "Two Out of Three Ain't Bad".
The new penalty regime covers late submission, late payment and interest harmonisation – and will usurp the existing rules in stages
The new penalty regime covers late submission, late payment and interest harmonisation – and will usurp the existing rules in stages.
You can read more about the new system here.
What is MTD?
Making Tax Digital (“MTD”) is an initiative from HMRC, aimed at making the UK’s tax system one of the most advanced digital tax administrations in the world.
In a nutshell, it compels businesses to maintain digital tax records and submit their information online - giving HMRC access to near real-time data, while giving businesses better visibility of what tax they owe throughout the year.
You can read more about MTD and how you may be affected by the changes in our new eBook - Making Tax Digital: The Next Stages.
If you're in need of help to ensure you're MTD compliant, our team of cloud accounting experts are here to help. Get in touch with our Business Development Manager today on (0121) 295 8884 or at firstname.lastname@example.org to find out how we can support you.