HMRC issued three publications relating to MTD on 1 December 2017:
Making Tax Digital: sanctions for late submission and late payment - summary of responses confirms the announcement at Autumn Budget 2018 that the government intends to proceed with a points based penalty system for late submission. Some further details were provided on:
Comments are not being invited at this stage but there will be a technical consultation on the legislation in 2018. The government then intends to apply the new model in phases to different taxes. It is anticipated that the model will first be implemented for VAT, commencing in 2020, following a soft landing period of 12 months.
Making Tax Digital: interest harmonisation and sanctions for late payment presents options for aligning rules and rates of interest across the main taxes and for late payment penalties. The government is now proposing a hybrid model combining elements of the current late payment penalties for income tax with an interest type calculation. The Tax Faculty would welcome comments from members on these proposals as soon as possible but by 2 February 2018 at the latest please; by email to firstname.lastname@example.org.
The third publication, Making Tax Digital: changing the scope and pace - technical note provides a revised statement of impacts for the Making Tax Digital for Business programme, reflecting the changed scale and scope of the mandatory elements (i.e., only for VAT initially) announced in the government’s written ministerial statement of 13 July 2017.
Despite the reduced scope of MTD, HMRC estimates a contribution of £1bn by 2022/23 from closure of the tax gap due to error and failure to take reasonable care. HMRC estimates steady state savings for businesses of £16m per annum. The estimated transitional costs are £131m before tax relief; this is £110 approximately for each of the 1.2m businesses affected. This is a very low estimate; it seems difficult to imagine that the average cost to business to implement the changes will be less than a day’s work.
Have you tried an appeal to the Information Commissioner?
Brexit, and this - they must be mad! (But we know they live on another planet)
I tried to establish how HMRC thought that sending 5 returns a year could possibly be cheaper than sending 1 by FOA request. They refused to divulge their calculations and one can only assume this amount is completely fictitious. I know of no-one that expects any savings whatsoever, all expect increased costs.