Give us your details and we’ll be in touch asap

Insights

All Articles

Business Services

Business Tax

Personal tax

Probate and Inheritance Tax

VAT

Business Services

MTD for VAT costs more time and money than expected

By RJP LLP on 10 February 2020

Making Tax Digital was intended to simplify tax compliance for businesses, but the results show a very different picture. According to a new ATT and CIOT survey, 70% haven’t seen a reduction in accounting errors and 30% have seen errors increase. In addition to this, businesses have seen their compliance costs rise, with the average business owner spending hundreds of pounds extra on MTD for VAT compliance. 45% of respondents have spent between £109 and £500 on costs and 12% have even seen their costs soar over £5,000.

Compare this to the estimated average cost of £43 per VAT-registered business made by the government – the reality is significantly more.

The CIOT survey also found that businesses are not experiencing an increase in productivity in return. Only 14% experienced an MTD productivity boost and 51% have seen productivity drop.

The survey results indicate that MTD for VAT has not made tax easier and the change has not benefited businesses. Armed with these findings, the CIOT and ATT will be asking the government to conduct a full review of MTD before its scope is further extended.

VAT-registered businesses with a turnover above £85,000 have been submitting their VAT returns using MTD-compatible software since April 2019. Plans were in place for MTD to be extended to other taxes, but these have been postponed indefinitely.

The ATT and CIOT conducted their survey of business owners and accountants throughout December 2019 and January 2020 and based their reporting on a total of 1,091 responses.

If you have any concerns relating to MTF for VAT, please contact partners@rjp.co.uk.

Read more articles like this

Is it time to review your payroll operations?

Beware of ‘tax efficient investments’ involving offshore trusts

Managing the reduction to AIA (Annual Investment Allowance)

Mitigating the worst impacts of an inflationary environment

More help coming but not quite yet…Chancellor’s Spring Statement 2022

Share this:

All Articles

Business Services

Business Tax

Personal tax

Probate and Inheritance Tax

VAT

Image

60 Day Deadline for CGT Returns and Tax Payments

If you sell a property and incur capital gains tax on the transaction, you will need to file a tax return and also pay any tax that is due within 60 days of completion, or penalties will arise. Need help with your property taxes? Talk to us.

Making Tax Digital was intended to simplify tax compliance for businesses, but the results show a very different picture. According to a new ATT and CIOT survey, 70% haven’t seen a reduction in accounting errors and 30% have seen errors increase. In addition to this, businesses have seen their compliance costs rise, with the average business owner spending hundreds of pounds extra on MTD for VAT compliance. 45% of respondents have spent between £109 and £500 on costs and 12% have even seen their costs soar over £5,000.

Compare this to the estimated average cost of £43 per VAT-registered business made by the government – the reality is significantly more.

The CIOT survey also found that businesses are not experiencing an increase in productivity in return. Only 14% experienced an MTD productivity boost and 51% have seen productivity drop.

The survey results indicate that MTD for VAT has not made tax easier and the change has not benefited businesses. Armed with these findings, the CIOT and ATT will be asking the government to conduct a full review of MTD before its scope is further extended.

VAT-registered businesses with a turnover above £85,000 have been submitting their VAT returns using MTD-compatible software since April 2019. Plans were in place for MTD to be extended to other taxes, but these have been postponed indefinitely.

The ATT and CIOT conducted their survey of business owners and accountants throughout December 2019 and January 2020 and based their reporting on a total of 1,091 responses.

If you have any concerns relating to MTF for VAT, please contact partners@rjp.co.uk.