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Written question asked by Lord Vinson (Conservative) on Monday, 6 June 2022, in the House of Lords. It was due for an answer on Monday, 20 June 2022. It was answered by Baroness Penn (Conservative) on Thursday, 16 June 2022 on behalf of the Treasury.

VAT: Electronic Government

Question

To ask Her Majesty's Government what assessment they have made of the likely impact of HM Revenue’s ‘Making Tax Digital’ compulsory VAT scheme on the number of SME business that have (1) ceased trading, or (2) reduced turnover to below the VAT threshold.

Answer

There is no evidence to suggest that businesses have either ceased trading or reduced their turnover to below the VAT threshold due to Making Tax Digital (MTD) for VAT.

Following the successful introduction of MTD for VAT-registered businesses with taxable turnover above the VAT threshold in April 2019, the Government has extended MTD for VAT to all other VAT-registered businesses from April 2022.

Independent research shows that businesses using MTD-compliant software for their VAT obligations are realising efficiency benefits and the resulting reduction in errors is leading to additional tax revenue.

Secondary information

Type
Written question
Reference
HL690
Session
2022-23
Subjects
Small businesses VAT Electronic government
Link
View this Written question on www.parliament.uk