HMRC has given some small firms an extra year to comply with Making Tax Digital (MTD). The policy, introduced in April, sees self-employed people and business owners with a turnover above the £85,000 VAT threshold filing their returns online using specialised software. HMRC had said it would not issue any fines to businesses filing late in the 2019/20 tax year unless they were deliberately avoiding the new rules. It has added a concession which will give businesses with complex or legacy IT systems until April or October 2020, depending their filing deadline, to make their first submission.

A spokesman for HMRC said: “HMRC allowed all MTD businesses a one-year soft-landing period to put digital links in place,” adding that ongoing engagement with businesses and stakeholders has prompted it to offer a process to apply for additional time.