Making Tax Digital Is Live
Making Tax Digital (MTD) is live for VAT and has been since 1st April, and yet here we are 4 months on with business owners still struggling to comply, whether it’s filing or making payments, only today business owners are taking to Twitter to frustration that they cannot pay HMRC their VAT.
One HMRC Customer, @adamjhunt was airing his struggles to HMRC on Twitter today…
It remains important for business owners to keep up with HMRCs stance on penalties and what they should do if they have problems with filing or making payments.
HMRC are expecting businesses to make an effort to comply, and if you fail to make a payment regardless of it being their systems, it would be prudent to provide evidence of the efforts you made and the errors you encountered.
What failures may incur penalties?
There are 3 key areas to consider;
- Failure to maintain digital records as defined under MTD
- Late filing of the VAT return
- Late payment of the VAT liability
If you can prove that you have made a genuine effort to comply with digital record keeping, HMRC have advised that they will not pursue penalties relating to this.
As for late filing and late payment?
Under MTD, HMRC want businesses to pay their VAT on time, those who fail to pay their VAT or pay late remain subject to penalties.
What precautions should business owners take?
- Pay the right amount of VAT by the deadline – beware if you have a direct debit set up, the payment is triggered by the return being filed successfully, so issues submitting could impact on your payment.
- If you are experiencing filing issues, contact your software provider as early as you can ahead of the deadline.
- Document issues encountered, screenshot error messages, keep a log of times and dates that your submission and / or payment has failed.
- Contact HMRC, as with many things in life- the problem gets worse if you ignore it. If you are having difficulties, speak with HMRC or ask your accountant to do so – some advance warning of your issues may just prevent a penalty being issued.
Why is it important to document difficulties?
If a penalty is issued you will want to appeal it. Calling HMRC and saying “the system failed” is not sufficient, they will want you to prove that you had made genuine efforts to file and make your payment on time. This is because you will be appealing on the grounds that you had a ‘reasonable excuse’ for failing to comply.
If you have had difficulties submitting your vat, you can call HMRC on 0300 200 3700, tweet them @HMRCCustomers @HMRCGovUK and don’t forget to log your contact with them.
Avanti can help you with HMRC compliance, we were ahead of the game with MTD, keeping our clients up to date with the change and how it would impact them.
So if you’re going round in circles, and value your time too much to be wasting it with failed submissions and HMRC communications, speak to a member of the team today for a no obligation quote (08000) 388 799.