That’s according to the Northern Ireland Tax Committee in its response to the consultation “Making Tax Digital: interest harmonisation and sanctions for late payment”. The Committee also advocates a soft landing period of at least 24 months to allow businesses, in certain circumstances, extra time to update legacy systems to be fully compliant.

Given the scale of change within HMRC over the last five years and proposed changes still to come, the Committee recommended that the Implementation Oversight Forum be re-established and tasked with conducting a post implementation review of HMRC Powers, Deterrents and Safeguards. Any changes made to the penalties regime should only be made after such a review and research has been conducted.

In addition, if new penalty models are to be introduced, HMRC will need to consider if its systems will have the ability to provide real time accurate views of data submitted so that taxpayers are always dealing with the most up to date information. This will be particularly important in the 30 day window after a return is due to be submitted when no/reduced penalties can arise.

The start date of MTD for VAT comes just days after the UK will leave the European Union. Already, businesses and their agents are experiencing severe pressure on their time and resources given the particular challenges that Brexit issues, such as customs regulations bring.

In that context, as a minimum the Committee made the following three key recommendations which would be helpful to businesses and their agents in the context of this consultation:-

• The window within which a taxpayer either pays the tax due or arranges a time to pay before a late payment penalty is charged should be 21 days and not 15; and
• A reasonable and fair soft landing period of at least 24 months should be considered for any MTD related sanctions or any new penalties or changes to the current regime are introduced; and
• Agents should have access from the outset to their client’s digital tax accounts which should be updated in real time with accurate and complete information.

You can read the response to the consultation on here.