HMRC had not issued any fines for the 120,000 businesses who have been recorded as having missed the tax deadline in August. HMRC has further promised that such leniency regarding these fines will continue in light of a possible no-deal Brexit. 

Sean McGinness, VAT partner at Saffery Champness LLP and a member of the firm’s Landed Estates and Rural Business Group, said: “An estimated one in four VAT registered businesses has so far failed to comply with the new online filing rules that came into effect in April. HMRC estimates that 490,000 VAT registered businesses with sales above the VAT threshold of £85,000 should have been filing under the new system by 7 August. However, it is known that there have been a number of difficulties encountered with the new system, and higher than average calls to an overworked HMRC helpline by concerned taxpayers struggling to make their returns on time.”

He added: “The leniency of HMRC in this instance is appreciated, as is the announcement last week that its light-touch approach will continue until a possible no-deal Brexit deadline has passed.”

Mr McGinness concluded: “Businesses should not, however, take this as a green light to do nothing and must continue to file and pay their VAT. Penalties for non-payment can be up to 15% of the VAT liability due and HMRC will not hesitate to take whatever steps are necessary to recover unpaid tax where it is being withheld rather than for any difficulties in making the switch to the new digital regime.”