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Haines Watts Bristol Phone icon 0117 974 2569

As the date for compliance with Making Tax Digital (MTD) for VAT has now passed, those with VAT registered businesses with a taxable turnover of over £85,000 will now need to ensure they are compliant with the new rules or have a relevant exemption accepted.

Every business will have their own approach to deal with MTD for VAT and the announcement by HMRC that they will be taking a light touch approach to penalties for those who are trying to comply with the new rules, but don’t quite get it right, is welcome.

What businesses may not be aware of is that this light touch approach may not extend to surcharges for late submission of your VAT return, which does not have a financial cost on its own, or the late payment of VAT, which can have an immediate financial cost.

To avoid a surcharge arising where you have tried to comply with the MTD regulations and have been unable to do so, you may need to complete a reasonable excuse claim covering the late submission/payment. If you encounter problems when submitting your VAT return you should therefore document the issues that you have encountered, including dates and times, so this can be provided as evidence to HMRC to substantiate a reasonable excuse claim.

Screen shots should be taken where possible as a source of evidence to support the claim. Also you should contact HMRC to advise them that you have been unable to submit your return or pay on time, as this will then lead to a record on your HMRC account which will also add to the evidence to uphold your claim, as you are taking a proactive approach to dealing with the issue you have encountered.

HMRC will however, expect you to pay your VAT liability on time, even if you have experienced difficulties filing your VAT return. This is due to the fact that you should know what your VAT liability is, even if you can’t submit a return to HMRC. Those whose VAT is collected by direct debit will have a much better case for the late payment of VAT, as they may argue that they are unable to arrange alternative payment until they know they cannot file their return, and this may be too late to be able to make the payment by another method.

Therefore, in order to avoid any potential VAT surcharges for late filing or payment of VAT, be prepared and collect all the evidence available to substantiate a reasonable excuse claim. As the only time to capture a detailed and accurate record of the evidence required is at the time you are unable to file the return.

If you experience any issues with MTD for VAT, contact our team of specialists here to find out how we can help you.

Want to know more? Call us on 0117 974 2569 or email

About the author

Gill Herniman

Gill is a qualified Chartered Certified Accountant and Chartered Tax Advisor, which enables her to offer clients a wide range of advice and expertise.

Gill was appointed as a Partner at Haines Watts in Autumn 2017, where she now heads up the North Devon Office based in Barnstaple.

With a background in agriculture, part of her role at Haines Watts is to develop client relationships with farmers and farm related businesses, and this has led to Gill working closely with the Crediton and Exeter Offices to reinforce their agricultural expertise, as well as concentrating on clients within the North Devon area.

Gill has over 20 years of experience in the accountancy profession, which has covered all aspects of accountancy and taxation for owner managed business and personal tax clients, as well as working with clients to help them plan for the future. Therefore, the rest of her role is focused on working with owner managed business and personal tax clients to provide them with services not only to meet the compliance requirements, but also to help them achieve their personal goals and objectives.

Living on a dairy farm and having 2 children, keeps Gill busy outside of work hours, but when she finds the time she enjoys swimming and going to the gym.

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