Making Tax Digital (MTD) for VAT regulations are now taking effect, and most businesses that have a turnover of £85,000 will now need to submit their VAT returns using software that is compatible with HM Revenue & Customs (HMRC) systems.
However, recent research suggests that there are thousands of qualifying businesses that have not registered for digital VAT returns yet, and they remain at risk of being penalised by HMRC.
While HMRC has implied that it will seek to penalise businesses that purposefully avoid making the changes, a spokesperson for the Revenue has explained that the 1 April date is not a “cliff edge”, as the first quarterly filings through MTD will not happen until July and August. Moreover, the spokesperson went on to say that HMRC accepts that the changes will mean an adjustment period.
The Government has been championing the benefits of the new system, with Mel Stride, Financial Secretary to the Treasury explaining that MTD will give businesses more control over their finances, allowing them to spend their time focusing on innovation, growth and the creation of jobs.
He added that quarterly submissions are designed to encourage businesses to have an ongoing review of tax payments, which should help them to understand how tax affects their yields.
Furthermore, the digital software should help businesses to have greater visibility of their records, recognise human errors more easily and streamline their payment processes.
Julian Borley, Director of VAT at Milsted Langdon said: “MTD has now launched, however thousands of companies are still not yet registered.”
“If your business isn’t MTD ready, then it is important you seek specialist advice sooner rather than later. Contact Milsted Langdon today to find out how we can help.”
For more information about how Milsted Langdon can help, please contact Julian by emailing firstname.lastname@example.org or calling 0117 945 2500.