HMRC Consultation outcome: MTD interest harmonisation and sanctions for late payment
Released 6 July 2018
HMRC have published responses to the consultation on options for aligning rules and rates for interest across income tax, corporation tax and VAT.
The Government is reforming tax administration penalties. This is part of wider work to harmonise tax administration processes across taxes, taking into account other changes such as the introduction of Making Tax Digital for Business (MTDfB). The Government announced on 1 December 2017 its intention to introduce both a points based late submission penalty model and a late payment penalty model alongside it, which would together form a coherent package. The consultation Making Tax Digital: Interest harmonisation and sanctions for late payment was launched at the same time. The Government has published draft legislation for the proposed changes to interest for VAT, late payment penalties and late submission penalties alongside this summary of responses. Final decisions on all of the measures will be made after consultation on the draft legislation. The decisions will include dates for implementation and for the rates that will apply. The new penalties will not apply to any tax or accounting periods starting before 1 April 2020.