Chartered Accountants
‘Soft Landing’ For Making Tax Digital Coming To An End
As mentioned in our previous article, HMRC adopted a 12 month ‘soft landing’ period for Making Tax Digital (MTD) which is due to end on 31 March 2020.
HMRC explained that the purpose of the soft landing was to give businesses time to put in place “digital links between all parts of their functional compatible software”. Digital links refer to the connection between a business’ accounts package and HMRC, and is the cornerstone of MTD for VAT.
During the soft landing period, HMRC confirmed that they would not penalise businesses for not complying with MTD. Philip Hammond mentioned in the Spring Statement 2019 that they would take a “light touch” approach to late filing and issues with record keeping, stating “where businesses are doing their best to comply, no filing or record-keeping penalties will be issued”.
With the soft landing period coming to an end, it looks like the main areas that will be subject to penalties are:
- Failing to submit returns on time.
- Failing to pay VAT on time.
- Failing to maintain records which comply with the requirements of MTD, this is a new offence.
With 31 March fast approaching, businesses must ensure that their current accounting records and processes are compliant with MTD requirements. If you have any concerns about your records, please contact our Making Tax Digital Taxperts.
