The financial benefits of MTD for VAT could be as high as £915 million, according
to analysis carried out by HMRC.
Since April 2022 all VAT-registered businesses should be using MTD compatible
software to keep digital records and submit returns.
HMRC used responses from a survey with businesses in MTD for VAT using fully
functional software to estimate the average time savings businesses have made.
The results showed that, on average, businesses have saved time on their
'business' finances and record keeping' compared to time spent before MTD.
Across all VAT businesses using fully compatible software, the time saved is
estimated to be between 26 hours and 40 hours per business per year.
HMRC said that if this was extrapolated to the population, it estimated a time
saving of between 32 million hours and 49 million hours in the 2022/23 tax year
across all businesses in MTD for VAT.
The financial value of this time is estimated to be between £603 million and £915
million.
HMRC said:
'The results of our analysis provide strong evidence that Making Tax Digital
is having a positive impact for businesses. The findings complement other
published estimates of the administrative burden of Making Tax Digital and
demonstrate a wider economic benefit, beyond any requirement to meet tax
obligations.'
Internet link: GOV.UK