VAT-registered businesses that missed a deadline earlier this week to sign up for Making Tax Digital (MTD) will not be penalised on two conditions.

HMRC said that those affected would not be sanctioned as long as they file their VAT return on time using its old portal.

MTD applies to VAT-registered businesses in the UK with annual taxable turnover of more than £85,000 in 2019/20.

Those firms have to sign up to submit digital accounts through MTD at least a week before their filing deadline.

The sign-up window for 7 August 2019 - the first quarterly deadline to submit VAT returns through MTD - closed on 31 July 2019.

A number of businesses are believed to have missed that deadline, but the Revenue has given them a temporary stay of execution.

HMRC's MTD for Business Customer Readiness and External Stakeholder Team said:

"Businesses won't be penalised this time, so they can file the old way and come back to sign up [for MTD] in time to file the next return.

"Although we will not penalise them, they will receive a letter from us telling them that they missed the deadline and asking them to take action."

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