MTD for VAT proving costly and failing to reduce errors

The implementation of Making Tax Digital for VAT (MTD for VAT) has proved costly and has failed to reduce errors, according to a survey by the Chartered Institute of Taxation (CIOT) and the Association of Taxation Technicians (ATT).

30 Jan 2020

The implementation of Making Tax Digital for VAT (MTD for VAT) has proved costly and has failed to reduce errors, according to a survey by the Chartered Institute of Taxation (CIOT) and the Association of Taxation Technicians (ATT).

The results of the survey of over 1,000 businesses and agents contradict HMRC's claims in regard to the benefits of digital tax reporting.

Nearly 90% of survey respondents said MTD for VAT had not reduced errors and over 70% said it had little impact on errors made by their clients. The CIOT and the ATT found that the majority of remaining responses highlighted an increase in errors rather than a reduction.

Although HMRC estimated the average transition cost to be £109 per VAT-registered business, less than 10% of respondents said this was the case for them or their clients. Almost half put costs between £109 and £500, and 12% estimated costs to be over £5,000.

Commenting on the findings, Tina Riches, Chair of the joint CIOT and ATT Digitalisation and Agent Services Committee, said: 'These initial results underline our concerns that, far from bringing benefits to businesses and the Exchequer, MTD for VAT has so far created additional, costly obligations for most businesses beyond what was predicted by HMRC.

'Appropriate software can, when used properly and in accordance with a business's needs, deliver significant benefits. But our survey demonstrates that MTD for VAT is not currently delivering those benefits to businesses, nor likely to reduce the tax gap. A thorough review and further consultation is needed before extending its scope.'

Free Consultation

Get in touch with us today for a fresh perspective and a free consultation.

Connected Accounting logo

Providing simple to understand accounting services for private and business clients with a hands-on approach. Building strong long-lasting relationships that you can trust.

Connected Accounting Limited | Registered Number: 09617704 | Registered Office: St Albans office

St Albans

Contact Details

St Albans Office:
Connected Accounting, 2 Victoria Square, Victoria Street, St Albans AL1 3TF .

Call us: 01727 537 160

2021 WFA Winners

Reviews and Ratings for Accountant Samuel Troy, Tonbridge
Home | Our Pricing | Resources | Contact us | Accessibility | Disclaimer | Privacy | Help | Site map | © 2024 Connected Accounting. All rights reserved. We use cookies on this website, you can find more information about cookies here.