Government confirms the new late submission penalty regime

06 December 2017

The Government has published its summary of responses to a consultation which set out the planned approach to a new late submission penalty regime. The summary confirms that, following significant support on the points based model (Model A) during the consultation period, the Government plans to take forward this model and carry out further consultation on the draft legislation in Summer 2018.

A consultation, Making Tax Digital: Tax Administration, was opened on 15 August 2016 and the summary of responses to this consultation identified that more work was required in order to get the late submission penalty model right. A further consultation was opened on 20 March 2017, Making Tax Digital: sanctions for late submission and late payment, and set out three possible penalty models for late submission which the Government proposed.

The summary of responses shows that the consultation received 59 responses, and these are listed in greater detail at annex A of the summary document. The large majority of those who responded to the consultation favoured Model A. Many respondents cited Model A as the option which was the fairest and the simplest, which promotes positive behavioural change.

Model A is applied per tax and a point is incurred each time a customer fails to provide a submission on time. A penalty is charged after the points received reach a certain threshold, with the points being reset to zero after a period of good compliance with submission obligations. The document also sets out the penalty thresholds which the Government intends to proceed with; -

Submission Frequency

Penalty Threshold


2 points


4 points


5 points

The Government also intends to proceed with the periods of “good compliance” as stated in the table below. If the compliance period is achieved a taxpayer’s points for a specific tax will be reset to zero.

Submission Frequency

Good compliance period


2 submissions


4 submissions


5 submissions


Alongside the summary of responses, the Government published a further consultation, MTD: interest harmonisation and sanctions for late payment, which aims to simplify interest and late payment penalties.

The intention is to introduce the changes to both late payment and late submission penalties as a joint package to enable the two penalties to work well together and reduce the number of annual changes being made to penalties. The new model, in conjunction with new sanctions for late payment, will be legislated at the earliest opportunity and then be available for introduction for different taxes which will include failure to submit Making Tax Digital for Business (MTDfB) reporting obligations.

Aspire Comment

Whilst we would all hope that we never forget to submit a return or pay the tax due on time, we are all human and mistakes do happen, which are sometimes out of our control and in the boundaries of reasonable excuse.

If you are aware that you are not able to meet you reporting obligations, or if you have failed to pay the tax which is due in relation to your company or personal tax returns, please do not leave it any longer and get in touch with Aspire.

Alternatively, if you are unaware of what your reporting obligations are or you disagree with a tax assessment, then get in touch with Aspire to discuss how we can help.