National Insurance rises are only the start – even more tax meddling is on the horizon

3) Be aware of penalties 

There are separate penalties for late submission of a VAT return and for late payment. Both operate on a points based system. If you miss a submission deadline, HMRC will issue you one penalty point. If you accrue too many points in a given period, a penalty of £200 will be applied by the authority.

Your points threshold will depend on how frequently you submit a VAT return. This means those making annual submissions must accrue two points before a penalty is applied, quarterly submissions must hit four and monthly filers two. 

Separate tallies will be recorded for VAT and income tax with separate penalties subsequently applied.

However there is some good news. Following a recent government announcement, these penalties will not now apply until January 2023 rather than this April as originally planned, so HMRC can test its systems.

4) Get help to grow your business 

The Government has introduced a scheme called “Help to Grow: Digital” to encourage companies with between 5 and 249 employees to benefit from digitisation. Unfortunately this does not apply to sole traders. 

Companies can receive up to £5,000 to cover the cost of 50pc of the approved software used. The list of approved software providers is limited but includes Sage and QuickBooks.

I have a general concern about the way these changes are being introduced. Clearly businesses will welcome the additional time to prepare themselves. However, the delay on penalties seems to be for the benefit of HMRC rather than taxpayers. 

The delay in implementation of MTD for self-assessment is also welcome but, even allowing for Covid, it gives the impression of inadequate planning. 

I would have more confidence in the process if the Government had recognised the timescales that would be involved at the outset and stuck to them. It was recently revealed by accountants Saffery Champness that just 9 people remain from the 877 who originally signed up for the MTD self-assessment pilot, hardly a ringing endorsement of forward planning.


Tax Hacks is written by Mike Warburton, previously a tax director with accountants Grant Thornton, and is published twice a month on Tuesdays. You can email Mike on taxhacks@telegraph.co.uk 

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