Avoid Complacency with Tax Digital Leniency

There have been numerous reports in the press regarding the leniency shown to businesses that failed to file their VAT returns using Making Tax Digital by 7^th September – the mandatory deadline for the first scheduled returns. Due to delays, system issues and complaints from business groups, HMRC has applied a ‘soft touch’ approach to this first phase of uptake and in many cases has not fined companies for failure to comply. Whilst 230,000 businesses did meet the first deadline, it is estimated that up to 80,000 did not, but HMRC has opted against fining these companies. With fines ranging from £100 – £400 subject to the size of business, it would have been rich pickings for HMRC, but they have been quoted as saying they will only apply fines in these early days of MTD for ‘deliberate non-compliance’.

Despite this leniency, we would still urge all clients to ensure they are compliant as quickly as possible as no one can predict when HMRC may change its stance. Where we are your nominated agent for VAT, we will continue to advise you and move you on to MTD compliant systems, as previously communicated. For those clients that manage their VAT in house, we would strongly recommend updating your software and registering on the MTD service ASAP. We are happy to help in any way possible, so please do not hesitate to contact your client manager or a member of the Haggards Crowther team for assistance.

Hamid Mahmood ACMA CGMA

Hamid has a wealth of experience advising owner-managed businesses across a wide range of issues, including the sale of businesses, value generation for shareholders, and formulating and advising on tax-efficient strategies. He’s also a specialist at helping start-up companies reach their full potential through teamwork, strategic thinking, and leadership.

His expertise spans technology, cryptocurrency, property investment, and various service-based industries, offering clients tailored solutions to navigate their unique challenges effectively.