A Cumbrian accountancy firm is warning businesses that they could be in for a shock if they don't comply with new digital tax rules. 

Lamont Pridmore are warning that hundreds of businesses within the county will face penalities if they don't comply with Making Tax Digital for VAT. 

Since the beginning of April, VAT registered businesses with a taxable, annual turnover below £85,000 must now comply with HM Revenue & Customs’ (HMRC) flagship digital tax system and new electronic filing requirements. 

The mandatory compliance in terms of the digital process has been in place since April 1, 2021. 

According to HMRC, only around a third of VAT-registered businesses with taxable turnover below the threshold have voluntarily signed up to MTD for VAT ahead of the deadline.

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The switch-up requires businesses to record and report their VAT affairs digitally each quarter using one of two methods - a bridging tool or HMRC-recognised and fully compatible MTD software solutions - of which the bridging tool connects non-MTD software such as spreadsheets to the HMRC systems. 

Graham Lamont, Chief Executive at Lamont Pridmore, said: "We appreciate that many small businesses are already having to make difficult decisions about spending and investment, but if they don’t comply with the new MTD rules they could face serious penalties down the line.

"While the latest cloud accounting solutions may seem more expensive, in the long run, they can provide incredible insights and automation that eventually help many businesses to save money and spot risk, as well as new opportunities."

Graham added that HMRC had made it clear that it expected every business to make "every effort to comply" with the new rules and he is concerned that significant penalties may lay ahead for those who do not act now.

Chris Lamont, a Partner at Lamont Pridmore, said: "We have already helped hundreds of other businesses implement compliant systems within their operations, which has not only made the new recording and reporting requirements easier but also automated many day-to-day financial functions.

"What’s more, our clients now have a far clearer picture of their businesses’ financial health in real-time, which has proved invaluable to many during the decision-making process."

If you have not taken steps to become MTD compliant, you can contact Lamont Pridmore by visiting www.lamontpridmore.co.uk or calling 0800 2346978. 

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