MTD burden won’t be an excuse not to pay VAT digitally -- Stride
A confirmation that the taxman will be 'light-touch' when enforcing Making Tax Digital has been sounded alongside what he won't be as lenient about.
Speaking at the weekend about MTD, a Treasury minister said that while the government would not “come down like a ton of bricks” as a general rule, there was a clear exception.
“We will hold the line on actual payment of VAT,” Mel Stride MP told the Sunday Times. “If companies are out there using the admin burden as an excuse…that would result in a sanction.”
The disclosure that payment will be the determining factor for HMRC penalties will potentially unsettle the many thousands of traders who still need to register in time for the April commencement.
The Revenue told them last month: “[We have] been clear that during the first year of mandation…[we] will take a light touch approach to digital record keeping and filing penalties where businesses are doing their best to comply with the law. But this does not mean a blanket ‘no penalties promise’.”
The minister’s comments about when penalties will arise follows new research from the Federation of Small Businesses showing that the average trader will face a bill of £564 for 'MTD-compliant' software, compared to HMRC's estimate of £280.
“Software fees come in the form of one-off charges or annual subscriptions,” the federation said. “The bigger the business, the higher the cost. Those with a turnover between £500,001 – £1 million are set to be landed with a £872 bill for MTD-compliant software on average. For firms with a turnover of more than £1 million, that figure rises to £1,019.”
12th March 2019