Penalties: points, review or suspension?

HMRC has published a consultation on penalties for late submission and payment under Making Tax Digital (MTD). It outlines three options for a new penalty for non-deliberate failures to meet regular submission obligations. According to HMRC the aim is for these to operate for all taxes with regular filing obligations although it may be necessary to include special rules to ensure they work for monthly or annual filing.

Points

The points-based model proposed in the last consultation has been revised and would apply for each tax rather than across all taxes. A taxpayer would receive a point each time they failed to provide a submission on time. When the points reach a certain threshold a penalty would be charged.

The points are reset after a period of good compliance.

Regular review of compliance

HMRC would carry out an automated regular review of the taxpayer’s...