That’s according to the Northern Ireland Tax Committee in its response to the consultation “Making Tax Digital: sanctions for late submission and late payment”. A “soft landing” period of 12 months is simply not a long enough period to allow taxpayers who come within the scope of the new submission obligations being introduced by Making Tax Digital (“MTD”) to gain familiarity with the new system before the associated penalty regime begins.

The Committee also advocates that the Implementation Oversight Forum be re-established and tasked with conducting a post implementation review of HMRC Powers, Deterrents and Safeguards project. Any changes made to the penalties regime, including the introduction of penalties for MTD, should only be made after such a review and research has been conducted.

As part of the MTD project, it will be even more vital for agent’s to have access to their client’s digital tax accounts. Where late submission penalties are concerned, agents could play a vital role in making their client aware of where penalty trigger points may be and in assisting their clients to fulfil their compliance obligations.

Although MTD is not directly comparable to the current digitisation plans of The Australian Tax Office (“ATO”), the ATO has recognised early in their digitisation process that allowing tax agents to have full access to their clients’ records from day one is a fundamental and necessary requirement to the scheme’s success.

The Institute is currently developing an MTD online hub which will be launched over the next few months. This hub will contain a number of resources to help members prepare for MTD. A MTD event is also being planned for later in the year.

You can read the Northern Ireland Tax Committee response on here.