Making Tax Digital Deadline Passed: What To Do If You Are Not Compliant
Making Tax Digital deadline passed: What do you need to do if you are not compliant?
Making Tax Digital for Income Tax is now in effect for businesses and landlords exceeding the £50,000 threshold. If you’re unsure whether your records meet the new standards or if you’ve already missed a submission, you’re not alone.
Many business owners realise that once the deadline passes, gaps in their bookkeeping become more apparent. Disorganised records, missing transactions, or late updates can make remaining compliant difficult.
The key point is that most issues can be amended. Acting promptly makes the process much simpler and lessens the chance of further penalties.
Disorganised records can quickly lead to compliance problems
When bookkeeping is not kept up to date, meeting reporting deadlines becomes more difficult. Under Making Tax Digital, this is even more crucial because updates need to be submitted regularly, not just annually.
Common problems include:
- Transactions not recorded
- Bank accounts not reconciled
- Receipts missing
- Personal and business spending mixed together
These issues do not always lead to immediate penalties, but they increase the risk of late or incorrect submissions.
Missing transactions can affect your submissions
Under MTD, information is sent to HMRC more frequently. If records are incomplete, the figures submitted might not be accurate.
This can lead to:
- Corrections needing to be made later
- Delays in submitting updates
- Questions from HMRC
- Additional work to fix earlier periods
Small gaps can escalate into larger issues when reporting occurs multiple times a year.
Late submissions can lead to penalty points
HMRC now employs a points-based system for late submissions.
Each missed deadline adds a point, and once the point limit is reached, a financial penalty is applied.
Points stay on your record until you meet the conditions to reset them. As Making Tax Digital (MTD) requires more frequent reporting, the risk of missing a deadline increases if your bookkeeping isn’t up to date.
Late payments may also incur interest charges, even if the delay was due to incomplete records.
Fixing past bookkeeping is usually possible
If you have fallen behind since the MTD deadline, the situation can usually be rectified.
This may involve:
- Updating missing entries
- Reconciling bank accounts
- Correcting earlier figures
- Checking previous submissions
- Making sure records meet digital requirements
It can take time to restore everything to order, but once completed, future reports are much simpler.
Attempting to delay until the next deadline often makes the task more difficult.
Getting ready for the next reporting period
Making Tax Digital is an ongoing process, not a one-time change. It requires continuous reporting throughout the year.
This highlights the importance of shifting from catch-up bookkeeping to a regular routine. Keeping records up to date monthly, or even weekly, makes quarterly submissions much simpler and reduces the risk of penalties.
Once a system is established, staying compliant becomes considerably less stressful.
Ongoing support makes compliance easier
Many businesses only seek assistance when issues arise. While one-off corrections are feasible, continuous bookkeeping support typically stops the same problems from recurring.
Regular bookkeeping involves:
- Records stay accurate
- Deadlines are easier to meet
- Submissions are ready on time
- You always know where your business stands
It also implies that future MTD changes will be simpler to manage.
How Rosemary Bookkeeping can help
If you’re unsure whether you’re fully compliant after the MTD deadline, seeking support now can help avoid further issues.
Your local Rosemary Bookkeeper can assist you:
- Bring your records up to date
- Correct errors and missing transactions
- Make sure your bookkeeping meets MTD rules
- Keep everything organised for future submissions
Most problems can be fixed, and the sooner they are reviewed, the easier it is to stay on track.
