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Detail of outcome
Respondents were supportive of proposals to replicate HMRC’s existing compliance powers under Making Tax Digital. Legislation will be included in Finance Bill 2017.
Having considered all the responses to the proposals for late submission penalties, HMRC recognises that more work needs to be done and will look again at this. We can confirm that in order to support customers during the transition, customers will be given at least 12 months before they are charged any late submission penalties.
Most respondents considered penalty interest was the most attractive option for a late payment sanction. Current interest rules for Income Tax and Class 4 National Insurance Contributions will continue to apply. HMRC will consult further on specific proposals for late payment penalty interest and the alignment of interest rules in 2017.
At Budget 2015, the Government set out the vision for a transformed tax system and in December 2015 launched the Making Tax Digital Roadmap, outlining more detail about what the transformed tax system will look like by 2020.
Because of the scales of these changes there is a lot we need to ask people about. We have published 6 consultation documents, each focusing on specific customer groups or elements of the Making Tax Digital reforms.
Focus of this consultation
This consultation covers aspects of the tax administration framework that need to change to support Making Tax Digital. It also sets out proposals to align aspects of the tax administration framework across taxes including the simplification of late filing and late payment sanctions.
This consultation will be of interest to all individual and business customers, agents and representative bodies with an interest in the tax administration framework.