13 Jul 2020 10:25 AM

It may seem like a distant memory now, when MTD for VAT was first brought in for businesses to apply, in April 2019.

The level of non-compliance, even now, however is a whopping 16% of those businesses required to do so.

As a result HMRC has recently completed a survey of some of the non-compliant businesses to identify the reasons behind it. The majority of those surveyed were keen to comply with the new rules and often were putting in considerable effort to do so, however they were struggling with gaps in their knowledge or skills or they were missing relevant information to continue the process.

The main reasons for non-compliance were found to be:-

  1. Lack of knowledge, information and skills
  2. Lack of urgency
  3. Time and cost
  4. Factors outside the taxpayer’s control – eg poor health or technical issues

HMRC are again writing to those businesses that have not yet signed up in an attempt to get the remaining non-compliant businesses registered. The survey would suggest that this is unlikely to be effective, with HMRC communications being described as ‘vague’ and ‘stressful’.

To date, HMRC have taken a soft approach and no penalties are being issued for non-compliance but this is unlikely to remain the case.

If you have any questions about registering for MTD or need help getting registered, please do get in contact with us.