With Making Tax Digital (MTD) now well underway and expanding further over the coming years, it’s vital that your business stays on top of its responsibilities. Failing to meet HMRC’s requirements could lead to more than just admin headaches, as you could also face financial penalties and reputational damage. Fortunately, TreyBridge Accountants is here to help your business stay compliant, avoid mistakes, and ensure you’re fully prepared for the future of digital tax reporting.
Why you need to stay compliant with MTD
Making Tax Digital isn’t optional. Whether you're a sole trader, landlord or limited company, HMRC now expects certain income groups to keep digital records and submit tax data more frequently, starting with MTD for VAT and Income Tax Self-Assessment (MTD ITSA). Non-compliance comes with multiple risks.
Financial penalties: Missed deadlines and incorrect submissions can lead to fines.
Penalty points: New rules mean repeated mistakes will stack up over time.
Reputational risk: Falling behind on tax responsibilities may damage your credibility with lenders, clients or investors.
How the MTD penalty points system works
Under HMRC’s updated system, late submissions won’t trigger an instant fine. Instead, you’ll receive a penalty point for each missed submission deadline. Once you reach a certain threshold, you’ll be fined, and further points will continue to add up.
The threshold depends on how frequently you’re required to submit:
Annual submissions = 2 points
Quarterly submissions = 4 points
Monthly submissions = 5 points
Each point expires after a set period (e.g. 24 months), but only if you stay compliant in the meantime. Reaching the penalty threshold can result in an immediate £200 fine, followed by further penalties for continued non-compliance.
How to stay compliant with Making Tax Digital
Avoiding penalties is entirely achievable when the right systems and habits are in place. Below are some key steps to help your business stay on track.
Keep digital records in real time: Don’t wait until the end of the quarter. Recording transactions regularly makes everything smoother and more accurate.
Use HMRC-approved software: This ensures your updates are submitted correctly and on time.
Set reminders for key dates: Don’t rely on memory alone. We recommend syncing deadlines to your calendar and using software alerts.
Review your records before submitting: Double-check income, expenses and VAT entries before filing.
Work with a trusted accountant: We can manage your submissions on your behalf or provide tailored guidance to help you remain compliant with confidence.
How TreyBridge Accountants can support your business
The accountants and tax advisors at TreyBridge will work closely with you to make sure MTD compliance isn’t a burden.
Recommend and set up the right software.
Ensure your digital records are accurate and up to date.
Submit your quarterly updates and annual declarations.
Help you avoid penalties and spot issues early.
With the right processes in place, you can focus on running your business whilst we take care of your tax responsibilities.
Don’t let MTD penalties catch you out
Get in touch with TreyBridge Accountants today on 01482 235575 or fill in our contact form for tailored, proactive support that keeps your business on the right side of HMRC.
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