Economic benefit may not be all that it seems
HMRC’s final evaluation of making tax digital (MTD) for VAT perhaps unsurprisingly comes up with a positive overall conclusion. I’m sure there is some spin here but the underlying research seems rigorous and shows at the very least that the introduction of MTD for VAT has not been the disaster that some predicted. I have no doubt that this research will embolden HMRC’s confidence in rolling out MTD for income tax. But I would sound two notes of caution.
The first is the obvious point that VAT compliance was (largely) a quarterly process anyhow so the changes required for MTD for VAT were much less significant than they will be for MTD for income tax where millions of businesses will have to cope with quarterly reporting for the first time. This is likely to be more disruptive and expensive in the short...
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