Readers’ forum: MTD penalty

I have spent the past year trying to make sure my clients comply with making tax digital for VAT grateful for the assurance that there was a 12-month ‘soft landing’ during which the full rigour of the law would not be enforced in some aspects.

Now we have reached this point in time and I have realised that one of my smaller VAT-registered clients has just exceeded the registration threshold for the first time. I presume that they do not get a ‘soft landing’ but must comply in full from the beginning. However I am not sure what happens if they do not and instead file their VAT returns using the same system that they have operated in the past. What sanction can HMRC impose? If it is simply a ‘failure to deliver a return’ the sanction is default...