A recent survey carried out by CIOT and ATT has shown that a majority of businesses are spending more than HMRC’s predicted costs to implement Making Tax Digital for VAT. It also revealed that there have been no significant benefits in productivity and that many are reporting no decrease in errors.
Productivity
29% of respondents indicated that their practice has seen no increase in their productivity while another 29% said they’ve seen a small decrease since MTD for VAT was rolled out. Their clients are reporting similar figures, with 33% having seen no change and 28% indicating that there’s been a small decrease in productivity.
As Making Tax Digital was launched, HMRC said they aimed to recover some of the £9 billion lost to avoidable mistakes. Practitioners responding to the CIOT and ATT survey indicated that there has been little impact in reality on the number of errors made with VAT returns under MTD, with 80% saying there’s been a small to no effect on the number of issues.
HMRC estimated the initial cost to businesses to be £109, with ongoing costs estimated at £43 per year. In reality, almost half said costs were between £109 and £500 to get set up, and 12% reported costs over £5,000. In regards to ongoing compliance costs, the majority put this figure at between £43 and £500 per year, while 19% said it would be from £500 to £1000.
CIOT and ATT
The Survey Team said:
“We have shared the full results, including the freeform comments, with HMRC. We have also issued a press release, and we will be submitting a Budget Representation, drawing on the results of the survey.”
You can find the source data here.
BTCHub
Our powerful MTD for VAT Solution is designed to allow quick and easy VAT returns to HMRC, without breaking the bank. Find out more with our BTCHub playlist on YouTube.
Get in touch to find out how you can be MTD-compliant for less! Call the team on 0345 241 5030 or email sales@btcsoftware.co.uk for more info.
