Businesses need to seek advice if they have any questions regarding the new digital tax regime which came into effect in April 2019.
Making Tax Digital (MTD) for VAT was launched in April and thousands of VAT-registered businesses above the VAT threshold (£85,000) across the Cumbrian region are now recording and reporting their affairs digitally to HM Revenue & Customs (HMRC).
With many facing their first reporting date in the coming months, Lamont Pridmore is advising that nationally there had been issues and confusion surrounding registration for MTD, which left Lamont Pridmore with concerns for local businesses.
HM Revenue & Customs (HMRC) has warned businesses across the UK that the registration process for Making Tax Digital (MTD) for VAT takes seven working days.
This means that VAT-registered businesses need to register more than seven days before submitting their first return if they want to pay their tax bill by direct debit. Registering involves setting up a Government Gateway user ID and ensuring compatible software is in place.
Businesses are currently benefitting from a ‘soft landing period’, which will last up to a year, to get MTD for VAT in place and be reporting their affairs accurately to HMRC without facing a penalty.
However, many aren’t aware that they must register for the scheme in order to use it and have everything in place by their first reporting date.
Looking ahead; MTD will be likely to affect more businesses as the Government looks to extend the system to other forms of taxation by April 2021 at the earliest.
This new process will require a far larger number of businesses, including those below the VAT threshold, to report their affairs digitally on a quarterly basis, this includes sole traders with income from one or more business, as well as income from letting UK property.
How can Lamont Pridmore help?
Whatever the size of your business, MTD will ultimately affect your firm in the future so it pays to be prepared.
Part of our approach is the promotion of existing online accounting platforms and our dedicated cloud accounting service.
To discuss how the MTD reforms may affect you and your business, please contact us.